By Linus Mundy
Money. It can make us happy, as most of us believe, or miserable, as many of us know through personal experience. It can buy us food, education, comfort, even freedom. It can also ruin marriages, families, and friendships, and has contributed to the decline of entire societies. Everyone’s financial story or situation is unique. And it sometimes surprises us to find that even wealthy individuals and families experience enormous stress because of their finances. In Daniel Defoe’s Robinson Crusoe, before Crusoe leaves home and gets into all kinds of trouble, his father tells him that “the middle state” in life is the best state in the world, “the most suited to human happiness, not exposed to the miseries and hardships, the labour and suffering, of the mechanic part of mankind, and not embarrassed with the pride, luxury, ambition, and envy of the upper part of mankind.” Of course, young Crusoe ignores this advice and heads out for great wealth, only to become stranded on a deserted island. The majority of us would probably place ourselves in this “middle state,” and yet find it stressful to keep up with things. Indeed, millions of Americans face major economic hardship. This CareNote attempts to address the problem that so many “middle state” folks encounter—problems that come to us out of the blue, as well as problems that we ourselves may have created.
Working your way through.
In olden days, those who failed to meet payments were put into “debtor’s prison.” Nowadays, we may put ourselves into another sort of prison—trapped, as it were, feeling unable to escape from the iron bars of money shortages or debts. Why? Partly because today it’s hard to think of ways to spend a pleasant Sunday afternoon without spending money. Buying things and experiences has become a major part of modern life. Living in this kind of culture, we are urged to spend more and more, and it seems there are fewer and fewer ways to get ahead. We can instead easily fall behind, sometimes so far behind that we think we can never catch up. But there are always positive steps to be made that can set us back on the right track.
Identify the problem areas.
In the area of personal finance, it is important to deal with smaller issues before they get the chance to grow out of control. But the human spirit wants to believe it can overcome most adversity, that the financial problems one is facing are only temporary, that it’s a “cash flow” issue, or the tide will turn at some unknown point in the future. But just as it is critical to learn from our past mistakes, it is important to be very specific about the causes of our present financial stresses. Was it due to spending more than you make? Spending on future income? Overusing credit cards or credit in general? As to credit and debt, experts agree that in general, most debt is to be avoided, except in cases where it is an investment such as for acquiring more education, landing a promising new job, or building the foundation for a business or investment portfolio. In some cases, a tragedy may have befallen you: sudden job loss, disability, grave sickness, a natural disaster or accident without adequate insurance…the list goes on. In many of these instances, it will take all the courage and determination you and your family can muster to get your feet back on the ground. Don’t hesitate to reach out; there is no shame in seeking a helping hand, or many helping hands in such cases. There are agencies, faith communities, and professionals whose very reason for existing is to help people in such difficult circumstances. Give them a call or visit and get started with a plan.
Know what you are spending.
There is no better way to reach understanding than to arm yourself with specific knowledge. In this way, you can not only identify some of the undesirable habits you and your family have fallen into, you can create a simple budget that excludes some of these items and, better still, includes some of the things that are truly important to you and your family (and not the items you might buy just because your neighbor has them). Yes, “budgeting” may be an unpleasant word, but basically it is the simple exercise of making and keeping up with two lists of things: 1. Money that comes in, and 2. money that goes out. The key is that when you budget proactively this way, you can better begin to control what items you want to spend money on. Additionally, keeping track of what you spend can bring you information that will surprise you.
Don’t play mind games.
These are games we all play: “We saved $100 on that new refrigerator. Let’s use that savings to buy a day at the amusement park.” “We really need a new car; it will get us so much better gas mileage. Plus, Jim next door got a new _______ and it looks like a million bucks compared to our _______.” It is far wiser to be realistic, to be well-informed on the subject of finances. It does not have to be terribly complicated at all. One can learn so much by studying, talking, listening. Resources are available at libraries and online. There are local experts, maybe a parent or friend, not to mention paid professionals whom you can trust. They are well worth the small investment. Happy people tend to live well below their means, research shows. “I have found this statement to be the case in all of the studies I have conducted,” says Thomas J. Stanley, Ph.D., in his book, Stop Acting Rich. One of his major points: “You don’t have to impress other people so much—with your house, car, etc. This is no small thing to keep reminding yourself. Also, your true friends are not your friends because of what you have bought. You also don’t have to impress (that is, spoil) your kids.” One basic rule most experts agree on: be careful where you choose to live. Your choice of house will probably have the biggest impact on your spending—either a lot or maybe not so much. There are so many unpredictable costs of living amid “big spenders.” While you may be able to afford the big, beautiful house, what about the things in and around your home?
Make financial decisions that are based on your values.
Our financial choices should be intentional and purposeful, as much as possible; they should not just “happen.” There is so much good that can come from wise money choices, including the sense of pride and satisfaction that comes from being in control of our money and spending it on things that matter. This includes, obviously, the spiritual and psychological rewards of contributing to worthy causes both locally and globally. There can be much joy in supporting what you truly believe in and care about, rather than on things. At the same time, we know, both in our heads and in our hearts that while finances are important, more money will not always make our own lives happy or happier. Indeed, one expert puts it very succinctly: It need not take a lifetime to realize that we can adjust our attitudes toward money; we can become less materialistic; we can value time with loved ones more than the stuff that money can buy.
Oscar Wilde once quipped that, “Anyone who lives within their means suffers from a lack of imagination.” And comedian George Carlin cynically concluded that, “It’s called ‘the American dream’ because you have to be asleep to believe in it.” In reality, it’s usually the small, everyday mistakes that really mount up and hurt our “dream.” But, thankfully, it is also the small, everyday rational decisions that help us meet our needs, and perhaps even our dreams.
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