You know the phrase “when my ship comes in”? People use it to talk about getting rich. I'm thinking it harkens back to the days when trading ships were sent out to gather goods and bring them back, or maybe to sell goods and bring back all the money. The point being that if someone says their ship came in, they mean they got nicely wealthy. Most often, though, people use it to point to some time in the future, when they hope they will be rich. Not too many people refer to it as an actual fact in their lives.
I will spare you the details, because frankly it's all rather painful for me to think about for too long. Suffice it to say that we stood to make several hundreds of thousands of dollars (yes, you read that right) with the sale of our house in California… if we hadn't borrowed against it so largely to finance a business which eventually failed.
That was a pretty colossal money management blunder. And we are still fighting back from it ten years later.
But it's not the only money management mistake we've made; in fact, we're still struggling with some of them. I'm thinking that several of these habit patterns also contributed to our missing the “wealthy” boat. If we'd had the basics down and the foundation laid, then we would not have had to borrow against the house like we did.
Sometime in the future I'd like to come back and revisit each of these mistakes in more detail on the blog. I'd like to offer solutions for them, rather than just presenting a warning. For now, though, let's hit the highlights. I'm hoping readers can learn from someone else's stupidity — namely, ours. Sigh.
Don't do these money management mistakes like we did:
1) Living paycheck-to-paycheck. This is something we have done our entire married life. It seems like we are always stretched just right to the edge of what we can handle. Instead, we should have been actively striving to live below our means and to set money aside, even if just a little bit. Being in that habit would have meant we had a cushion to survive tough times without having to borrow as much.
2) Not planning ahead. This covers a huge range of financial topics. One I've been thinking about recently is the idea that kids get more expensive as they get older (says the lady who is putting three, count 'em: three, children in college this fall). We should have seen this coming MANY years ago and planned for it. But we always thought that day was far away, and/or we'd handle it somehow when we got there. I'm here to tell you that's not a smart way of doing things…
3) Using credit cards. This is a direct outgrowth of #1 and #2. And it is a really big ouch for me. I NEVER should have gotten that first credit card back in college – who knew you could get one just for being a student and for no other reason! The first time I used it without being certain I had the money to pay it off was setting a precedent for an attitude of “I need this now” rather than “I must wait for this.” Credit cards are so easy and quick to use on the front end, when you need to get the money. They're not so quick and easy on the back end, when you're trying to pay the money back. And thirty years later we are still struggling with that. WE DO KNOW BETTER. But we seem to be stuck.
4) Not abiding by financial decisions we had already made. One of the ways this was manifested in our case was by “investing” our retirement fund into the business. We had started the retirement fund early, like you're supposed to, to give it time to grow. But then we didn't respect that decision, and we pulled the money out for other purposes. That's like stealing out of the “food” cash envelope to pay for the jeans you want to buy. Yes, jeans could be considered a need – but the point of a budget is to decide how much you want to spend in certain categories and then abide by it. Financial decisions should not be characterized by being fluid and changeable. Sometimes in an emergency situation that may have to happen, but not as a regular occurrence. If we had left our retirement fund alone, by now it would have been a fairly sizeable chunk of change.
5) Buying into the idea of a dream home. Oh y'all, we Americans love our American dream, don't we? We don't want just any house, we want one much larger than our grandparents ever even conceived was possible. With granite countertops and stainless steel appliances and a gazillion bathrooms. For a long time I resisted this idea, giving into the practicality of our finances for the early years of our marriage and family. But when we moved to Missouri after the failure of the business, I somehow decided that I deserved something more like my dream home. Ten years later we wake up and realize we should downsize – and our beautiful home has been on the market for over 18 months. I guess no one else has the same dream I had, lol. We'd be in much better shape financially if we hadn't stretched to buy this house but had settled for something smaller or even rented instead.
These are some of what has happened in our life. I'm sure there are others that I'm just not thinking of right now. It's not been pretty, I must confess…
This is a tough post to write, y'all. I am definitely airing some of our dirty laundry, here. NOW you know why I am so into ways to save money and being frugal – because we are still fighting money management mistakes that started years ago and even now have a hold on our lives.
But I can't be a writer and not be honest. If by some chance you've been thinking I have it all together – although if you've read even a few of my other posts, I don't see how that would be possible, lol! – you have now been disabused of that notion. :-)
The way I see it, I don't want to be alone on this financial journey. I'd like y'all to travel with me as we find ways to overcome our money management issues TOGETHER. Every post I write about money and frugality is a post I'm writing to myself, as well as hoping it will help someone else. If by my transparency today, someone is motivated to change their own financial picture, then my efforts “won't have been in vain for nothin'!”* :-)
Thanks for stopping by! If you want to walk with me as we fight against our money management mistakes – maybe you have a few of your own you're working through and want some company, lol – then consider adding your email address to the box at the top of the sidebar. You'll get access to my free printable weekly planner, as well as having all new posts here at Annie and Everything sent to your inbox on the day they are published. And you'll have a new friend – me! Feel free to shoot me an email anytime: Ann (at) Annieandeverything (dot) com.
[*Jean Hagen as Lina Lamont in Singin' in the Rain]
Shared on Frugal Fridays :-)