Several years ago when the Spousal Unit and I started to experience a decrease in our income, for the first time in my adult life I really had to get serious about tackling our finances. I am embarrassed to admit that for many years I pretty much mimicked what I had seen with my own parents when it came to money, get paid, pay your bills and if there is anything left just spend it. Yep, and I cringe in writing this but for years I never thought about what happens if???? No rainy day fund, no plans for the future just spend, spend spend. Always counting on future job growth and raises.
Early in our marriage we were netting just a hair under 6 figures and in that time saved not a dime and still managed to put things on credit cards. I know, just dumb as hell. I sometimes I wish I could go back in time for just a year, lets just say I would have a nice savings fund. Some might ask how did you get to that point? Like I said, my folks had no financial sense, we never talked money. I do recall seeing them stave off collectors and was an adult before I realized you can pay the light bill before they send the disconnect notice.
However in these rough financial times, I will say that the way I was raised (with little cash) has been helpful after all unlike my good girlfriend who just can’t imagine ever buying second hand clothes, I have no problems with yard sales, thrift shops or things like that. In fact I now prefer buying used over buying new. I get more bang for my buck and often net some unique items.
However in the past several years as I was saying, I had to start getting real serious about our finances, sadly it took a huge loss in income to get real about money. So I started surfing the net and reading folks like Dave Ramsey and Suze Orman. Now before I start I should say that I think both of them have some excellent nuggets of advice but overall I feel like they are not living where I live or where many folks are currently living. After all at the end of the day, these guys are laughing all the way to the bank on the funds they earn from us buying their products.
That said, the best thing Dave Ramsey says that I agree with is that everyone needs an emergency fund, look…I’m not talking 6 months of income put away. Yeah, that is a great goal but for many us including yours truly, that is not reality now or anytime in the future. Yet we all know situations where the car needs a minor repair or you need to call a plumber out and its a few hundred dollar expense, now maybe you can put it on the credit card and that is most certainly an option. However in this current economy you may not have that available on your card and you shouldn’t count on it being available, after all the credit card companies are reducing their lines. No, this is when an emergency fund is a great idea and really in my opinion what it is designed for.
Now if you are like me and don’t have much cash left over after paying the bills, you may be saying where the hell do I get the cash to fund this emergency fund? This is when cleaning out your house and having a yard sale or listing your stuff you don’t use on Craigslist would be a great idea. Two years ago, I made a decent sum getting rid of the kids stuff on ebay as well as my old Coach purse collection. I generated well over a thousand bucks in about 6 weeks time and while it didn’t go towards the emergency fund (I was out of work at the end of 2007) the money did go towards paying bills. So it was still worth selling shit off. Right now I am thinking of a spring yard sale and this time the cash will go towards the emergency fund, since last weeks plumbing debacle reminded me of why I need one. It was 4 days before pay day and I was running on empty thankfully a good friend was able to front me the cash till payday but its been years since I have had to borrow money and while I was thankful, truth is I don’t want to be there again.
Now other gems of advice that the financial gurus give you seems predicated on having folks who earn enough money like I used to and are just making bad choices with how to spend it. If you are like me and have been where I was until recently and simply did not have enough money to meet all the bills that’s when I find the advice these so-called gurus give to be rather lacking.
Look, the bottom line is you need food, shelter, utilities, transportation and any regular medical needs…these are what I call priority items. Lately I skim the financial boards and am amazed at the number of folks who don’t realize that if you are jobless, Visa and Mastercard are not a priority. Yeah, good credit is important but don’t pay the credit card folks to the exclusion of the folks who keep you housed. That’s just not a smart move. Suze talks alot about the important of a good FICO score, yeah it is important but if you are struggling, something has to give. Call me crazy but what good is having Visa paid but living in a cardboard box?
Also in these current times, we have to look long and hard at needs versus wants….cable TV complete with movie channels is nice, when you can afford it. However I axed premium cable a couple years ago when the going got tough and for the most part don’t miss it. Only reason we have any form of cable is that the company gave us a deal since we use them for internet. which in our case the internet is actually a legitimate business expense since the Spousal Unit needs it for work. Otherwise it would be gone.
I am an avid reader and love reading the newspaper, had home subscription..I now read it online for free. There are all sorts of small items we pay for, we consider them necessities but truth is they are not. Speaking of , I only had Starbucks one time last week, regular readers know about my battle with the Bux….better to use that money on more enriching activities.
So just a little financial advice from someone in the trenches.