Sharing Your Life & Your Finances

After my last post, which was also my first, you probably think I’m a little crazy. That’s okay, you’re in good company. Of course they say it’s a fine line between crazy and genius—I like to think I am on the later side. With that I figured I would tell you a personal story to get the ball rolling.

This story will be kind of hard to tell as it will no doubt cause me a lot of anguish. It’s not about me mind you, it’s about my girlfriend, and I’m sure she will be none too thrilled.

I’m a cautious person in general. When I was younger I had a nice little condo I bought when the market was in the toilet. It was a smart investment and it was safe. My mortgage was cheaper than rent. But the housing market didn’t stay in the toilet, the value of my little condo started to rise. Throughout this time my girlfriend lived in one state and I lived in another. Then one day it hit me—let’s buy a house together!

This wasn’t the type of thing I do. It was risky. I would get myself into a hefty mortgage, not to mention a committed relationship! But when this idea hit me, I knew it was a good idea—it was so clear to me.

Fast forward 4 months, me and my girlfriend have new house (new to us anyway) and we are sharing our lives and our finances. Together we went from spending around $500 on a mortgage to almost $2000! With both incomes we would be tapped every month between a car payment, insurance, gas, utilities and food. When we first got the house I didn’t have any debt, in fact I had cash in the bank. Remember, my mother taught me well. My girlfriend came from a slightly different socioeconomic background—she had around $10,000 in debt, and nothing to show for it. Really this wasn’t that big of deal. I am sure most of you are thinking, “So what?” “I whish I only had that much debt.”

As we knew all of our monthly money would go to expenses, I paid off her debt. We started at zero.

A couple months into our new arrangement we were discussing finances and I came to find out even though our lives had changed, my girlfriend’s spending habits had not. She began to rack up more debt. I honestly don’t remember how much, but I was furious. I pay off all the previous debt she incurred, and she was just going to make more? I don’t think so.

Now I am pretty easy going guy, but this is where I drew the line. I didn’t spend my whole life building good credit and saving money just so someone else could put me in the poor house.

With that I setup some rules and but the stop to all spending—myself included. My girlfriend was not thrilled, to say the least. In fact she was miserable. Before me she lived at home, rent free, and was used to spending money on whatever she wanted, whenever she wanted. But life had changed and we couldn’t afford to live like that any longer.

So a couple more months went by and my girlfriend came to me very sheepishly one day. She spoke with a whisper, her head hung low, “Well, uh, my work shoes are worn out and, and I need to buy a new pair.” I asked her, “Have all the bills had been paid? “Yes, of course” she replied. I then wanted to know if there was money in the bank. She nodded, “Uh huh.” My reply was, “THEN GO BUY THE SHOES!” “Go to the store and pay cash for them, why are you even asking?” I swear to you, I could see the light bulb over her head. She actually blurted out, “So this is how it works.”

Yes, this is how it works. We saved at least 30% on those shoes because we didn’t have to pay interest! Yes, I know it was just a pair of shoes, but if you live your life like this, you can always save that much. There we go, there’s that light bulb again.

By the way, my girlfriend is a very smart person. Guess what she does for a living… Would you believe she works in the financial industry? It’s true. It doesn’t matter how smart you are, or how much money you have--anyone can have bad spending habits.

Our society is part of the problem. We are bombarded with the hot and new thing we must have every day. Our lives are all about buying. We have too much crap, and not enough time to deal with it. All that crap cost money.

Of course we have to each accept responsibility for our actions too. If you have kids, are you teaching them good spending habits? And are you leading by example? If not, and you don’t know why, it’s because no one ever taught you. Of all my formal education the only thing I remember being taught in school about finances, was how to write a check. Great, I learned how to spend money.

Today my girlfriend and I are in our second house, and the mortgage is back down around $500 again—I’ll share more on that in future postings. More importantly we have never had a disagreement with our finances since—not one. She lives like I do and we have everything we need, and a fair amount of the things we want. In fact there are times when I say, “Honey, I am going to buy…” She will then ask, “Do you really need it?” Sometimes I whine, “Well, yeah.” But mostly my reply is, “You know, you’re right, I don’t need that.”

There are really two lessons here. First is the obvious fact that you need to make sure you aren’t spending more than you make. You can NOT live on credit; none of us can afford that. The other lesson is that people who live together, and share finances must be on the same page. Sadly very few people discuss these things before they take the plunge, and this can make for a very volatile living environment.

Okay, that’s enough for now. Until next time, pay cash!

Bubba

Are You Making the Most of Your Money?

I’m an American and I love this country but we have some issues. Don’t worry, I’m not going to try and suggest solutions to all of them here. I don’t have all the answer and I can’t tell you who does. The truth is, I think it’s hard to figure out what the real problems are these days. Everyone has a different opinion and the media will spin any give story any given way to sell advertising. But again, I am not here to list and/or suggest solutions to all of our problems.

There is one problem I do feel I can help people with however—money. I know you’ve heard it before. Between the Nigerian money scams and get-rich-quick schemes we are inundated with everyday, it’s hard to figure out what is real—just like I was saying above. So let me tell you what I am not. I am not a financial advisor or an accountant. I am not trying to sell you anything (Blogs are free!). I am not trying to get you to invest anything or lend me any money—this is not friends helping friends (a.k.a.: pyramid scheme). What I am trying to get you to do is send me cash for which I will re-pay you with a Money Order for more than your original investment—KIDDING! I am certainly not trying to pull that one over on you.

What I am all about is smart spending—using your hard-earned money wisely to make it go as far as possible.

Again, I am sure you have heard it all before. The difference here is that I am not trying to offer you the world for just three easy payments… All I have is logic and a few lessons in spending that I am pretty sure no one ever taught you.

Why listen to me? Well, I am in my mid 30s and I have a ½ million dollar home, 2 newer cars, and pretty much everything else I need in life—but I don’t have any dept. Now in all honesty, a $500,000 house isn’t all that impressive where I live—all I have is a decent house. My cars are from 2003 and a 2005. I could go on, but the point is I have pretty average things.

What’s not average about me is how I live financially. I don’t have any car payments. I don’t have any credit card dept, and my monthly mortgage is the cost of a typical car payment. And, no, I am not rich, I didn’t win the lottery, and I don’t have trust fund.

What I did have growing up however was a mom who taught me the value of a dollar and a lot of very good examples of how not to waste money. I feel I was taught a very, very valuable lesson, one that many were not.

What brings us both to this point, is that fact that everyone I see around me is in debt. These people, regardless of income, spend every penny they have before they even earn it. None of us have to live like that—and I am proof. My goal for this Blog is to offer others the education I was given. I really believe there are a lot of people who need it, and the more you say you don’t need it, the more I bet you do. This Blog is for everyone Young and old, rich and poor. If you are in debt or not, what I am going to share will help you.

This is just the first posting. I plan to do many more based on current events and my own personal experiences. I am going to tell you stories about friends and family (although I am going to changes the names to protect the innocent, namely me!). I am going offer up the things I do to remain debt free.

But ultimately I would like your story. If you come clean, and tell me your tale, I can help—I’m sure of it. I want to help you and share your story with the world. Don’t worry, I don’t need to even know your real name. The thing is, your story is not the only one of its kind. I promise there are other people like you out there with the same problem—probably more than you think. If you want help with your spending, drop me a line.

I guess this is a start. Let’s see where this takes us.

Bubba