Dave Ramsey has the right idea. In his book, Dave Ramsey's Complete Guide to Money, he repeatedly says that one lesson he had to learn the hard way was not to "take financial advice from broke people." So, who can you go to for financial advice? Dave says his life turned around when he went "on a quest to find out everything [he] could about God's and Grandma's ways of handling money." Bravo, Dave. You are a wise dude, indeed.
So, what exactly are my qualifications for claiming that I know something about money? Fair enough. Here are some of my credentials:
- I am a granny, obviously. And thanks, Dave. But more to the point...
- I am not a broke person. But, much like Dave Ramsey, I once WAS a broke person, and I learned a lot of valuable financial lessons the hard way in order to transform myself into a FORMERLY broke person.
- I'll add a third: I'm not after YOUR money, as so many "professional financial advisers" are.
How about if we start with some good news?
I'll bet nobody ever tells you that. What I am saying is, if you have made mistakes in the past, do not give up in despair; more money, and more chances to fix your mistakes, will come along! That's what I mean by saying that money is renewable. But does that mean I think it's okay to squander what you have today in anticipation that there will always be more tomorrow? Of course not! I also said money is a resource, not a party you get to throw yourself with every paycheck. Resources are things you USE in order to FUNCTION EFFECTIVELY. So do the best you can every time, and from that learn to do even better. You will have that chance.
There was a time when I struggled with my finances. I understood the importance of saving for the future -- having an emergency fund, contributing to my 401k, etc. -- but it was so hard to do that when I had kids who were expecting to be fed now, when I knew my car was going to need new tires soon, and when the credit card bill arrived and I found myself paying for all the necessities I hadn't been able to cover last month. One payday it occurred to me that I was about to try paying for
- my future -- by trying to save,
- and my present -- by paying to keep my car and my household functioning,
- AND my past -- by footing the bill for all the stuff I "paid for" with my credit card last month, much of which was already consumed and gone,
Everyone tells you that you need to break the cycle of debt, you need to pay current expenses in cash, etc. If you're finding that too hard to do, take note of how much of your next paycheck is gone before it's even in your hands, how much goes to cover spending that occurred before your funds even appeared in your bank account. There, right there, are the things you need to change first.
Recently I read a letter to an advice columnist that was written by a woman who thought she'd found the man of her dreams, had agreed to marry him, was making all sorts of plans for after the wedding, like deciding whose house they would live in, etc. -- and then she discovered that his house was in foreclosure. A little fact he hadn't bothered to share with her. She wasn't sure what to do, or even if she should bring up the subject with him. (That sound you just heard was my head exploding!)
Look, I know that money is difficult to talk about. At best, most people find discussions about FICO credit scores and mortgage types and 401k vesting schedules and term versus whole life insurance options excruciating boring. At worst, when the discussion is about how you've messed up your money and gotten into big trouble, it's shame-inducing and painful. But you have to do it.
Married people (or soon-to-be-married people) have the most at stake. Unresolved financial problems, differences in money-handling styles -- heck, just issues with this month's bills! -- are potential marriage killers. (I'm not just being dramatic here. Divorce rates are high, and money trouble is one of the most common reasons cited by people seeking to divorce.) You might think that, by NOT talking about your finances, you are avoiding conflict, but that is a disastrous mistake. Something -- a late bill, a bounced check, an untimely shortfall -- will FORCE you to face off on your financial issues. Furthermore, by then you will likely be in the throes of a highly emotional state, and then you've got the makings of a devastating situation.
So, you have to talk about money. And the time to initiate those talks is when you are in a calm frame of mind, when you are able to work together, and BEFORE urgent issues arise (thereby possibly avoiding them!)
No matter what, don't give up. Every little change has a rippling effect, and making positive change gets easier if you just keep trying!
Peace to you.