Intelligent Advice

I’ve been having a bit of an ongoing discussion with my cousin via email.  We’re talking about different ways to be smart with our money and that kind of thing.  This whole conversation got started because I told her that I had just gotten a new car (new to me; it’s a used car) and I was looking at the car insurance rates of different providers.  That comment kind of got us talking about various ways that we save money.  Here’s an excerpt from an email she sent me:

Sounds like you’re pretty good at managing finances…good for you. If I had a little more sense to be as careful as you were in my early 20s, I wouldn’t have spent the few years after that getting out of debt.

But if managing money consumes you, I agree that isn’t healthy. Life isn’t all about money right? I think as we will all one day lie on our death beds, the last thing we will think fondly of is how much money we have in the bank.

What you need to do is turn your skills at money management in your favor such that you wouldn’t need to worry so much about it. Have it work for you. Perhaps put portions of that away into more long term investments where your money earns you even more. If you just have that money sitting around in some savings acct, it’s just money sitting there waiting to be given to someone else.

Another method that could help is to plan a budget. Use a spreadsheet and just work out how your cash flow is month to month. Set aside some for retirement, some for bills, some for a rainy day, and don’t forget some for fun too. If you plan ahead this way, you may feel more secure in knowing you can freely spend $50 on that next meal without it meaning that you’ll suddenly go broke.

I know where you’re coming from, now as I’m running my own business, it freaks me out senseless when I don’t have “padding” in my bank accounts not knowing month to month how my revenue will be. You have to then realize that it’s not the money itself that is causing you to freak, but maybe the insecure feeling that there are things you can’t control. Perhaps just accept that feeling and have confidence that you can deal with anything that comes your way in the future WHEN it comes.

I posted that here because I think that’s pretty good and simple advice that can benefit many people.

It’s not that I want a ton of money just for the sake of having money or so I can buy a lot of stuff.  In fact, if I was loaded I would still probably live the same style of life I live now.  You wouldn’t even be able to tell I was rich.