Here are some techniques to help keep better control of your money.
Realize that money is important. Like health, shelter and food, money is important. Mainly because without enough of it, it is very hard to get health, shelter and food.
“I lead a comfortable life. The name of the game is comfort. Money is a lubricant. It lets you slide through life.” – Joseph Cossman
I am a fan of Joseph Cossman and really like this quote. It shows a balanced view of money. Plus, it is a perfect quote for this Life Of Comfort website.
Here are a few more quotes that are not quite as balanced. I find as I became older and more experienced, I find I agree with them more and more.
“Money isn’t everything…but it ranks right up there with oxygen.” – ― Rita Davenport
“When I was young I thought that money was the most important thing in life; now that I am old I know that it is.” – Oscar Wilde
“Take care of your money and it will take care of you.” – Carl George
Shoot. I thought I invented that saying until I googled it. It is all over the place! It is true though. If you take care of your money, it will take care of you when you are too old to work or are ill. It will also take care of you by buying you out of problems throughout your life.
“Control your money or it will control you.” – Richard Nazar
This is a lesson I learned through the hard way. If you do not control your money, you soon will not have much money. Then many of your decisions and the quality of your lifestyle will be determined by money or the lack of money. At this point, your money is controlling you.
Here is another quote by me:
“Whoever said money cannot buy happiness was wrong. Very wrong.” – Richard Nazar
Or, as I used to say that often in my younger, more undiplomatic days (I might stop using this one).
“Whoever said that money cannot by happiness is an idiot.” – Richard Nazar
I have been well off and I have been very poor. I can tell you that money does buy some happiness because it makes life easier. It can buy your way out of problems. As Joseph Cossman said “Money is a lubricant. It lets you slide through life.“
Of course, like anything else, there is no one thing that gives you ultimate happiness. If you are married to an abusive spouse or have a serious illness, no amount of money will make you completely happy. For most of us, money makes a difference to our level of happiness.
Poor people can be very happy but it does not take poverty to be happy. Studies show that people who make more than $100K/year are about twice as happy as those who make less than $100K/year.
Most people think 1 Timothy 6:10 says, “Money is the root of all evil.” Actually, 1 Timothy 6:10 says, “For the love of money is the root of all evil” (emphasis mine). Yes, the love of money is the root of evil, not money itself.
I remember a conversation with my painter, Mark. He has many rich clients and he said he likes rich people. Why? “Has a poor person ever given you a job? They can’t afford to, so they do it themselves. The rich are the ones who make jobs.”
The five people you spend the most of your time with will determine the level of your success and income. Choose these people wisely. They will determine your attitudes and values. Your income will eventually be the average of these five people.
If you find yourself needing to spend more time with better quality people, you do not have to abandon your friends. Just find five new high-quality friends and spend time with them.
Here is a cautionary tale. I know a woman who was living an upper middle class lifestyle. She hung out with accountants, top executives, etc. She invested in a building twenty years previously and now could live off of the income that building provided; that income was her retirement plan. The day I met her, she could have retired that day with $2000/month in her pocket after all expenses.
Over time, she started to spend most of her time with people who were bad with money and were broke all of the time. Eventually, she started saying that being poor was good and rich was bad and that people with MBAs were a**holes. She would ask waiters in restaurants what education they were pursuing. If the waiter told them they were getting an MBA, she would say, “So you are training to be an a**hole?” It was very embarrassing to be seen with her.
She then did something unprofessional and lost her main source of referrals. This permanently cut her six-digit income in half.
Eventually, she used the building to back a flaky real estate scheme and lost it all. She is now over seventy years old and has no retirement plan.
She still thinks rich people, corporations and MBAs are bad.
Put 10-50% of your money into savings and investing. I read that Oprah Winfrey was raised in poverty but always put 50% of her income away to invest. She is a multibillionaire today.
Most of us will have to start at the 10% savings and work our way up to 50%.
Pay yourself first. Take that 10-50% of your money and put it into savings or investing before you pay other bills. Otherwise that money will mysteriously disappear. If you pay yourself first, and don’t touch it, over time you will adjust and your bills will be paid and you will have money in the bank!
For those of you who run your own businesses but who feel you have nothing after paying your employee salaries and bills, here is what Jack Canfield did. In The Success Principles, he tells that he had a problem where after he paid his business’ bills there was not much left for him. Here is how he solved that problem. He took the amount of money he wanted for himself first, and then paid the business’ bills. Last, he paid the employee’s salaries. He said there is no better way to motivate your sales people to work hard.
Drastically reduce your use of credit cards. Credit card debt is the bane of most people’s existence. Much of our hard earned income goes to paying credit card debt. Worse, most of it goes towards paying credit card interest. A rule of thumb is to pay the balance of your credit cards in full every month. If you cannot, you are in serious financial trouble.
It is unrealistic to completely stop using credit cards in this day and age. They are needed for shopping on the internet, car rentals, etc. A more practical approach is to put the credit cards in a safe place like a drawer. Do not carry them with you. Use them sparingly, for convenience only.
Make a budget. Let’s face it; budgets are boring. Who wants to spend their time thinking about a budget? The good news is, once you have a budget, you will think less about money issues; budgets are freeing. Paying bills gets boring for about 10 minutes because with a budget paying bills online takes about 10 minutes and then you can forget about it!
Making a budget means writing down all your income and all your expenses and finding a way to make your expenses less than your income. To do this, either trim expenses or find additional income.
When I first do a budget, I find it depressing. Where did all these expenses come from? Where did the all the money go? After some pondering, I find ways to trim here and there and eventually the budget makes sense. Then when I follow the budget, tweaking it as I go along, my financial life becomes stable. Not overly exciting, but stable. At least it is not exciting in the wrong way! It also my wife and I to plan for our future.
Get family support, especially from your spouse. It is very difficult to manage money well if your spouse is undermining you.
Choose your life’s mate carefully. From this one decision will come 90 percent of all your happiness or misery. – H. Jackson Brown, Jr.