My Own Trek Towards Financial Armageddon
I invite all people suffering from a whirlwind of debts and huge spending to take a peek at Trent Hamm’s blog site- thesimpledollar.com. The first time I read it, I could not take my eyes of it! I could very much relate with Mr. Hamm’s insights and experiences- as a matter of fact, it is much like he was narrating my own financial story. Let me share how his ideas sank into my soul and help me strengthen my resolve to do something about my illogical lifestyle.
The Simple Dollar is an exploration of personal finance from the perspective of a late-twentysomething who just realized that he needs to get a grip on his money. Like him, I admit to being a spending maniac. But unlike him, I am still on step 1- that of realizing how my situation can worsen if I do not do something about it. In his site, I was particularly hooked up with his ‘The Road to Financial Armageddon’ chronicles. His life story is truly a must-read for people like you and me.
Bad spending habits result from how misinterpret the value of money. In my case, I treat money like how it should be- to spend, and to spend it fast. Among my many mistreatment include planning of nonsensical things to buy even before the actual payroll. I was even quoted to hate money so much that I want to get rid of it the moment I get hold of it. This absurd practice has its obvious downside. Except for a few low-return investments, I do not have any solid emergency fund in my bank account. Every cent seems to be allotted at something else. The one priority allotment that I have disregarded over the years is savings.
I did not grow up impoverished like Mr. Hamm was. In fact, my family was pretty much on the average side. Money was treated like a king in the family. Essentials like clothes and food were never gone. However, we had to sacrifice in terms of luxury. We grew up riding commuter jeepneys and tricycles. I was already in college when we bought our first-ever car.
If Mr. Hamm disregarded the important lesson of his childhood, it was the same scenario for me. I did not understand that tightening of the belt meant preparing for a better future. My perspective was that my parents were suppressing the gratification of their wants. That for me is a sin! I started dreaming of getting my first pay-check and buying all the things that were deprived of me during my early years. I had the absurd notion that this was what they referred to as financial freedom- me being able to afford anything that my silly heart desires.
Getting married early did not in any way stop me from falling into mismanagement of money. I was responsible enough to provide for the immediate needs of my family but I was also lenient enough to allow myself a shopping spree at least once a month. To put it bluntly, I do not have savings that could save me from an unexpected event in the future.
Every year, my husband and I would promise that we’d start saving on the subsequent year, very much relying on the incremental increases that we’d expect to have. But as incoming cash increase, our spending habits and lifestyle follow. After the second baby, maintenance costs were eating up almost all of our monthly budget.
Now, with the car mortgage nearly at its end, we started planning for a better future. Our goal for the following years to come is to live below our means- a temporary sacrifice for brighter future for our growing family. As what Mr. Hamm planned, we will start evaluating our debts and focus on eliminating them. Alongside this, we plan to put in little savings and other investments. However, there will still be some habits that we cannot totally eradicate, such as, our weekly visits to the mall. How we will control spending in the mall is something that we are prepared to do. It is all a matter of psyching-up. Malling now takes a different meaning for us- high on strolling and very low on shopping.
Watch out for more personal insights about www.thesimpledollar.com.
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