How a financial moron managed to handle money
How a financial moron managed to handle money
By: Bill Mead
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Posted by editor Tue Nov 30, 1999 00:00:00 PST
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0 responses 0 comments As you sift through your Christmas bills, you might be in the mood for Uncle Bill's Guide to Staying Out of Debtor's Prison.
I know. In this enlightened age they don't throw people in the hoosegow for not paying their bills. But don't let this mislead you into believing you won't serve time for getting in over your head moneywise. I can't imagine a crueler sentence than having to worry each day how you can stretch a limited income to meet a constantly increasing outgo. You haven't ever been in this fix? Why are you are suddenly lying to me?
My grandfather used to say that everybody was $87 short of paying their monthly bills. In these inflated times it's more like $870 short. Within that bit of earthy commentary lies the worst misconception people have about their financial affairs. Dr. Phil, television's notorious meddler in other people's lives, hits the nail on the head when he constantly reminds his tapped-out guests that they can't solve money problems with money. Most people with money problems aren't going to be saved with another $87 or even $870 a month.
This truth is confirmed by what happens to the majority of people when they come into a wad of money. The usual result is that a year later they are back in the soup even after paying off all their prior obligations. This human failing can be seen most vividly when strapped folks think they can reach fiscal paradise by tapping their home equities. Most of them find themselves in a deeper hole within a short time and with their heavily-mortgaged home in jeopardy to boot.
I'm the first to admit that taking financial advice from me is like asking Britney Spears for child care tips. On the other hand, I'm not the kind who sits down twice on the same hot stove. I have been in lots of trouble but I seldom forgot how I got there. For example, early in my forgettable career we were struggling to stay afloat financially. My first reponse was to take on extra jobs to kick the cash flow up a notch, as Emeril would say. Eventually I wore myself out and declared that we would somehow survive on what I could earn through a civilized work schedule.
The following year, our family income dropped by more than half. But something else happened. Our expenses declined even more because we accepted the urgency of tightening our belts. Now, decades later, my wife and I try to dredge up painful memories from that period but we can't remember any. In fact, some of our happiest memories stem from the low-cost fun we had then, driving cheap used cars and living with beat-up furniture. I don't kid myself that it was a great era for our three little girls but I think it's instructive that all three of them have become financially responsible adults. I know our long-ago retrenchment had a lot to do with that.
Young people especially need to be reminded that the thrill of buying things is fleeting but the agony of paying for them is endless. Take it from a guy who has done almost everything wrong the first time around.
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