A few years ago I went to Australia.I literally had just a backpack, a weeks worth of clothes, my laptop and a camera. I was there for over 5 weeks. When I returned, I noticed all the "un-needed" items around my place. I also started to look at my finances. I realized there were so many things I wanted to do in life and I had a lot of clutter holding me back. I started working on a plan to improve my finances and get rid of all the unnecessary items in my life. After being without luxury items for so long, my feelings about life, wants vs. needs started to change. I began reading books and talking to people. I have a cousin who is really good with his money, so I turned to him for advice. A lot people considered him cheap. I learned he was ahead of the game.
I started to recognize how in America we really aren't taught about money and smart purchases. I started selling off a lot of stuff in my place. It removed a lot of clutter and cleared my mind. Why did I have DVD's that I only watched once? Why did I have all of those "what if items?" You know "What if family comes over, I'll need _____." "What if my friend needs that?" What if 20 people show up for dinner?" It's amazing how many coffee mugs a person who doesn't drink coffee can collect.
My finances are far from perfect. I have issues with the evil credit cards and college loans. I still have a lot of "housekeeping" to do. But I'm happy I got started "cleaning" over two years ago. You see everything in the news (and you talk to people) and you start to realize that a lot of our culture has caused our problems. We're taught calculus and advanced math in grade school, but no one teaches us about interest rates, credit cards and saving. We're not taught about purchases being an investment versus just something we buy. I'm currently reading Suzy Orman's book "The Courage to be Rich." She talks about looking into purchases as an investment. Is that how we think about things in the USA? Do we think of the long term or just the impulse of the moment.
Orman talks in her book about our mental feelings about investment. When it comes to an investment, we recognize there will be time, energy and money involved. We consider the finances of the investment. The sad thing is we don't think the same way of something we just "buy" or "purchase." Do we really think about the time and energy involved to earn the money we just spent on a impulse buy? Do we think about the hours we worked to buy that cup of coffee or DVD that will sit on our shelf and gather dust?
Kelly and I recently went out to test drive a Toyota Prius. Most people will say the car costs too much because of the initial price $23,000 -$30,000. We looked at the car as an investment (just like a home). The next car we get, we plan to keep until it dies, not just the normal five years. We would spend 50% less or more in fuel. The government gives yearly rebates on your taxes and the maintenance is cheaper and less often. We started to realize this would save us money. Of course with the financial times, the interest rates and the prices; we are not ready to make a purchase. The car is something for the future. This story just proves the point of my one of my friends. You can actually save money be spending more upfront. We focus so much on the upfront price we don't look at the long term effects (investment). You have to ask yourself, "If I buy quality now(I might spend a little more), will is save me more money in the long run?"
That brings me to the end of todays blog. There're all of these reports about American's cutting back on their spending, all the financial troubles people are in, excuses of people being taken advantage of. I see this as a time for people to better educate themselves, their friends and their children about finances. The struggles this country is going through is a great opportunity for people to look in the mirror and realize we've been living above our means for a long time. The United States is often referred too at the "Richest Country on Earth." I guess we thought the riches would never run dry. I, just like everyone else is learning how to better look at my finances. Everything in the media is talking about and educating people on smart financial decisions. Why weren't we doing this years ago or in the schools? There are articles and tv shows on how to stretch your money. People used to laugh at me for going to TJ Maxx, Walmart, Marshalls, wholesale clubs and Burlington Coat factory. Now I'm reading stories about people who make six figures shopping at the same stores. I didn't go out to eat and always cooked dinner. Now their are cooking shows all over tv.
Good Luck to everyone in these tough financial times. I hope we all learn from whats going on now and realize we can't change the past, but there is still a lot we can do with our future!
When you get a chance, check out this article I found on USA Today's website.
