Personal Finance Advice

I have a relative who is at the mercy of every tiny financial bump in the road. When the dog has to go to the vet, or gas goes up two cents, or the power bill is higher than expected, or the car needs new tires, he is thrown into chaos. He hasn’t got the money for these things so everything becomes a crisis. It all either has to go on credit cards or be borrowed from family and friends. Since things like this happen in life all the time, this man is rarely settled. He’s constantly juggling accounts, working two jobs, and running around asking/hoping for money. He’s always changing jobs, looking for one that pays just a little but more. As if it will help.

It would be different if he genuinely had no money. But he makes a good salary. He just chooses to spend it on new cars, a luxury apartment, and a “lifestyle.” One day he asked me for money. (I declined because I think that at age forty-one he needs to sort out his own mess, not rely on others to do it for him.) I asked him in turn why on earth he chose to live like this. Why did he want to live life constantly putting out fires? Why did he want to live with that kind of stress all the time? Why didn’t he want to be in control of his life instead of being buffeted by every little thing?

He just shrugged and said there was never enough money to go around. Right then I knew this guy was hopeless. He’s not motivated to change and he isn’t willing to give up his lifestyle, even a little bit, to get more control over his life. To each his own, but I know it can be different.

If you’re tired of feeling out of control every time an unexpected expense crops up, I encourage you to take control. You don’t need millions in the bank to be in control of your life. You need some money set aside so that you can cover yourself if you have to take a pet to the vet, or pay out of pocket for a prescription, or deal with rising gas prices without turning to credit cards, loans, or family members. Ideally you’d have six months of expenses saved up so you could deal with life even if you lost your job. But even if you can’t save up that much, a couple of thousand dollars will make a huge difference in your chaotic life.

People always say that they can’t come up with that kind of money, but I rarely believe it. You can get that from your tax refund, from cutting out unnecessary expenses, or by diverting $20 a week from your paycheck. Unless you are living at poverty level, it’s not that difficult to stash a couple of thousand dollars in a savings account. Once you have the money, keep it liquid so you can use it to pay for your expenses. Don’t touch it for anything other than emergencies and if you use it, replace it as soon as possible.

It may not seem like much, but having some extra money can be very liberating. Suddenly life isn’t in control of you, you are in control of life. You don’t have to freak out every time a bill comes due. You don’t have to beg for money or rack up credit cards. You don’t have to panic if your company starts talking layoffs. You have a lot less stress in your life. You can focus on more important things. You’ll find that once you have that money, other financial things start improving, as well. Your debt goes down and you get motivated to save for other goals. Your health will probably improve, too, since you’re not under constant stress.

Think about it this way, if it helps. Instead of saving money, you are paying money (into your savings account) to help you get your stress under control and achieve a better life. It’s cheaper than therapy. Living a calm life is much better than living life in a constant state of panic and fear. And you can achieve it without having millions in the bank.