Sunday, March 23, 2008

Granpa's Corner: Money Managment

I got to wondering how did our country come to have such a problem with home mortgages and charge card balances?

I got to wondering if most of us have taken the time to look at our lives and to develop for ourselves specific goals that we would like to accomplish. What kind of plans have we put into motion to realize those goals?

I guess that when we are single and we don't seem to have responsibilities to anyone but ourself - we tend to feel invincible and no need to plan for emergencies. When we marry we assume responsibilities for the success of the union and the need for goals and planning is greater. When we create a new life (babies) we assume more responsibility and the need for goals and planning becomes greater.

I wonder if many people who wish to set up a retirement fund, an emergency fund, a school fund follow the need to "pay yourself first" advice? One needs to be able, if possible, to distinguish between their wants and their needs. For example. Why do you have a wrist watch? To tell time, of course. However, a Timex will keep time just like a Rolex, however it isn't as satisfying to our ego. The same applies to our house, car, clothes, etc. and requires in most cases small sacrifices to reach the planned goals we set up.

One of the things I found useful was not to buy things I could not pay for within 30 days or for cash (does not include large ticket items like a home, car, etc). When I was getting started I bought a washing machine on time with payments of $25 per month. The drive shaft bent and I couldn't afford to get it fixed and the darn machine just sat there, useless, while I kept making the payments. Taught me a lesson, see the above.

If you can set up goals and plans be careful to have realistic ones, things you can accomplish without severe stress. If you have a marriage partner be sure you both understand and agree as to what you want to accomplish and how you intend to do it. It is absolutely necessary for both partners to agree on monetary matters for any plans to succeed.

It looks like cutting back on our lifestyle is going to be a way of life for a lot of us as the conditions in the country weaken.

Good luck.

Granpa Graham

2 comments:

auhays said...

Great piece of advice from Grandpa Graham! I agree that most of us "young folks" want everything RIGHT NOW. The challenge is to not compare yourself to those around you. It sounds like we should compare ourselves to Grandpa Graham!

LG said...

Ha Agreed Hazer! I learned my lesson with Credit Cards and bad decisions in college, the hard way, but it was a good lesson and Thank Goodness I didnt ruin my CRedit! I wish it were illegal for people to give college kids a CC b/c they have no idea how valuable their credit is or how it can really hurt them down the road with buying house, car etc.

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