"A penny saved is a penny earned." ~ Ben Franklin
"A fool and his money are soon parted." ~ Proverb
"Beware of little expenses. A small leak will sink a great ship." ~ Ben Franklin
"A man in debt is so far a slave." ~ Ralph Waldo Emerson
I was raised by a military officer who became an accountant in his retirement. One would think this would make me a natural money manager. I was also, however, the youngest child and only daughter in my family (only one adopted as well). Translation? If I truly wanted something, I got it. I married someone who was the youngest child and only son. Translation? If he truly wanted something, he got it. This is a potentially dangerous combination.
In the first part of our married life (10+ years), we didn't do the best job of policing one another. We both worked hard and felt entitled to the material things we wanted. We earned it! Right? Neither of us was very good about managing a comprehensive money plan. Sure, we allowed a percentage of each check to go to retirement. We made sure we could pay our mortgage, car, insurance and other major expenses. We took vacations as a family at least once a year. Christmas and birthdays were magical times in our home where wishes for material things were filled. We bought the best homes and cars that lenders would allow. Even when George was laid off, we barely skipped a beat.
How did we do this? Credit, credit and credit.
We woke up one day and realized just how much debt we had accumulated. We were working to pay off...things...that had long since broken or been replaced. Our life had become a whirlwind of which bill was due next and how little could we pay to make it through until the next paycheck. We were in fact a slave to our debt. Ours was a house of cards...credit cards. One unexpected expense and it would all come crumbling down. It was time for a change.
We've spent the the last 5+ years cleaning up the financial mayhem we caused in the beginning and are finally at a point where we feel like we are in the driver's seat. In fact, we are working to get in to a position where we can retire comfortably and spoil our future grandkids (just as we ourselves were once spoiled).
Why do I tell this story? This is the one and only area of my life where I wish I could hit rewind. I would have lived off of 70% of my take home pay and split the rest equally into spend, save, and donate accounts. Spend would have allowed for the affordable indulgences including vacations. Save would be there for the emergency situations you can never anticipate. Donate would be there to help support the advancement of research, the protection of those in need and the building of the church.
I wouldn't trust a lender's projection over my own on how big of a house or car I could "afford." I wouldn't use credit to pay for consumable goods (grocery, restaurants, gas) unless I was earning some form of a cash value award and had a SOLID plan to pay 100% of the balance with each statement. I'd never let a balance on a credit card roll. I'd plan more "stay-cations" exploring the area around me or at least within a half-day's driving distance.
My fondest hope is that my children learn from our mistakes versus swapping war stories with us in our old age. But since we did everything we could to buffer them from that while providing for their every material need (as our parents did with us), I'm not sure we've done the best job of breaking the cycle :(
Only time will tell....
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