Personal finance: never stop learning

We’re close to 2014, in a time when the information is literally everywhere you look. Whether it’s about your own specialty, history, art or personal finance, there are gazillion of articles, shows, books that can help us all become more financially responsible. And yet many don’t bother.

Few years ago my main personal finance mantra was that ‘money is made to be spent‘. Yes, I was this idiot. Was under 30, no family ‘obligations’, had a nice job (at least I was willing to work and not have my family fully support me) and a pretty decent salary, especially for the time I had to spend on my job. Another quality of mine (except for not being a lazy bum) was that I loved learning and getting my nose into new things, so I already had some good experience with a side ‘business’, web design, which afterward became the main way for me to earn my money.

But other than these 2 qualities, I was totally immature with money.

Fortunately for me, being hard-working and wanting to get a job since I graduated high-school, helped me pay my college tuition from my own salary, so at least I didn’t get into debt at 20. But other than that .. I squandered money like there was no tomorrow. If my folks would tell me to slow down, my reply would be that 1. it’s my money and I do what I want with it (mature, told you) and 2. money should be spent.

After a while we had to deal with some serious emergencies because of my grandfather getting ill and dying after few days. They discovered he had colon cancer which had already spread, so there was nothing else to be done. The doctors did operate him, but he died that night in the hospital. We were BROKE almost and his pension was the biggest money ‘influx’ each month. So you can guess we weren’t sitting pretty.

It was the moment I kinda woke up a little. Was 24 at the time and finally realized life is not all roses and butterflies and not having any savings does bite.

No, it’s not yet a happy ending story … while I did put a stop to SOME of my reckless spending, I was still indulging in some small ones (thinking that 2-3 bucks here and there won’t hurt). At the same time I was working two jobs (told you, I wasn’t a slacker) and was also saving for the things we would need for the home: some improvements, new appliances, since ours were old etc. I wasn’t willing to get into debt over a fridge (even if it was already very normal for many Romanians to get such small loans), so I was saving for the appliances and buying them with cash.

And yet in 2008 I went and signed the papers to get a 4 year loan for a brand new car. I wasn’t willing to save for 2 years to get one or curb my spending. My new radio job was paying better than the 2 previous ones, was also getting some clients for my web design business and life was perfect. Just like many people on this planet, I thought good times will never end and the following years will be better and better.

My spending wasn’t as reckless as before (the car payments were HUGE compared to my salary and at least I was making the payments regularly), but I still didn’t bother with reading how I could make my money last longer, how to be more responsible etc. I was responsible enough for keeping up with the payments, wasn’t I?

And then 2009 hit us like a ton of bricks.

In July (16 months into my car payments) we received a call from Bucharest, letting us know the station was closing down. We all lost our jobs that day. I had my car payments and the business taxes, wasn’t even thinking about having to eat each month, these two were already huge things I didn’t have money for.

This is the moment when life really threw me a bone: I GOT LUCKY.

The desperation of not being able to land a job anymore (the best one wasn’t even paying for my car) and the realization that I need to make my web design business work, helped me push forward. I was always willing to work and put everything on the line, so this good work ethic helped me survive. After few very hard months, my freelancing career took off and I was able to make ends meet. If I come to look at it, 2009, the worst year of my life, actually became a turning point and the start of a better life. Sure, back then it didn’t look like this.

Not being on a salary anymore, my money wouldn’t come each month from ‘someone’. I didn’t just have to be present at work, do my stuff and get paid, I had to get clients, provide a good service, set my prices etc. Earning MY own money made the change 10 years of employment never did: I was more responsible.

It’s the moment I also started being more interested in anything having to deal with money. I read books on freelancing, on personal finances, saving money etc. I was pleasantly surprised to see this ‘economy’ stuff is not as boring as I though it would be and the knowledge helped me a lot. I’m constantly learning and educating myself, also trying to share some of the joys of not being the reckless money spender I used to be.

I wrote in my first paragraph that it’s shocking to me that, in this era of information, many people STILL have no clue about how to better manage their money. I was active online since 2002 and yet it took me almost a decade to start reading about money. It’s true that, at 20, you cannot expect someone to be too responsible. I do think that, if I bothered read at least few of the books I read since 2009, my entire story would be a bit different. Oh well, better later than never …

DO READ! GET INFORMED! LEARN!

It’s shocking to see how many people have no clue on how to keep a budget. It’s shocking to see how many people get into serious debt just because they are fooled by ‘the small payments’. It’s shocking to see how many people overspend just because they’re being lured in by all the TV commercials. It’s shocking to see how many people lose YEARS in their lives by trying to keep up with the Joneses and not understanding that life is not all good.

Maybe the recession was a good kick in our behinds. It was clearly one for me. This forced some of us to realize that we either change our ways OR DIE of starvation. We started reading, thinking about various personal finance advice and trying to see how it applies to us. We started saving, we paid off our debt and made it a priority. We’re planning for our retirement. And we’re gonna teach OUR CHILDREN all this, to help them have a better life and not go through the ordeal we had to face.

In conclusion, don’t ignore this. Information is power. A well informed consumer cannot be lulled in by idiotic ads. When you know how to make your money work better for you, the decisions you make will be the right ones.

1. READ – find articles, find books, know everything you can
2. study the ‘experts’ and find out what ideas are good for you. Don’t follow their teachings like a sheep, THINK and choose the best
3. ask around, give your own insights, make it a conscious effort to be more informed
4. teach your children and show them the right way. Let’s hope the next generation will do better than we did.

Personal finance is NOT hard, is not rocket science and there is a lot of information. Don’t ignore it, because you’ll be paying a very big price. You’ll pay with your hard earned money and with YEARS of your life!