Personal Finance Discussion

Introduction

Perhaps the best thing about my writing style is that I will not bog you down with industry related terminology that the average joe would not understand. There are two reasons I try to steer clear of using hard sources- we all got enough of that “CITE YOUR SOURCES” stuff in school AND I want to write in the exact same way that I speak so that you all have a much more entertaining time when you read my stuff. If you want super analytical financial papers- you came to the wrong guy because I want to TALK to you through my writings!

I put a post on my Facebook as I do from time to time and asked people which personal finance topics they wanted to talk about. I got a few responses and most of them were in areas that I am comfortable talking about without having to do an exuberant amount of extra studying or searching, again, my goal is to share with you my thoughts which come from previous research I have done but I want to do it in a way that you can UNDERSTAND me. 

The following is my PERSONAL OPINION so I am not saying it ‘works for everyone’- the goal is to get people to start to think about the changes they could make in their own lifestyles so that they can achieve their goals. 

Self Control

Ah, self control. What is self control? I am not a psychologist nor a doctor so do not expect some elaborate textbook definition from me. I think self control is one person’s mental willpower (ability) to confidently make decisions that benefit them in the long term (or for whatever goal they have) regardless of what their desire fueled neural pathways are ‘telling them’. 

Why are we talking about self control in a post that is about personal finance? Because it is important to not fall into the trap of letting the physical take over the intangible. 

What do I mean by this? By now we have all heard of the people who are rich but they are not happy- why? How is that they have everything yet they are not happy? Because they put so much emphasis on the tangible that they never had the most important aspect of their life in check- which deals with what is on the INSIDE. Not just your heart, but your mind and your spirit. 

That was a pretty vague and random example, as most of mine will be (I encourage you all to dive into deeper discussion with each other in comments or messages), so let’s talk about a more specific example that we can ALL relate to. 

You just worked your last shift of the week and it’s Friday, it’s PAYDAY! You get into your car, thankfully it starts just fine and then you head home. You’re tired, and you remembered that you didn’t eat lunch today because you were so busy. You see a Taco Bell and it is CALLING your name. You contemplate, “ehhh but I do have food at home already…. But it IS FRIDAY! It’s the weekend I totally deserve this…”, and you are absolutely right. You DO deserve a nice, unhealthy, but pleasure inducing meal from Taco Bell. The thing is, you KNOW you don’t NEED it, but you WANT it. 

I think more often than not, people will wire their brains to turn the “I want it” into “I need it!”. Think about all of your friends who would probably be in the JG WENTWORTH commercial that sounds a little like this, “It’s my _______ (insert unnecessary purchase, food, item, etc) and I NEED IT NOW!”- but do they really? 

Here is what I would like to offer regarding developing more self control, which can lead to healthier spending habits: START SMALL. Yep, start small. I’ll share a personal story for this example. 

Personal Anecdote with Developing Self Control

It is the beginning of my junior year and I have finally built enough credit to get my own credit card. Woohoo! I'm a big ballin now! Anytime I went out with friends I put it on my card. Anytime I went to get off work and felt hungry… I stopped by Taco Bell and put it on my card… anytime I felt like, “hm… that brownie dessert looks good” I would put it on my card. Now, I was always making enough to pay off my debts but the point is… I didn’t need all of that food… I study a lot of psych related topics on the side, especially regarding human brains, habits, and socialization and I learned that most people feel like they CAN’T do something because of the drastic change they would have to make in their life. 

When the spring semester came around and I sat myself down to get more serious about investing I developed a strategy for cutting down on my unnecessary spending. I knew I wasn’t going to like the idea of cutting it out 100% right away so I decided to cut my strategy into pieces, as long as I was spending less each month, then I was okay. As long as I wasn’t eating out more than X amount of times per week, then I am on track. As long as I stopped to ask myself if I wanted to enjoy now, potentially suffer later, then I was okay.

I went from spending upwards of $600+ on non grocery related food purchases to now maybe a little less than $200 a month. This did not happen overnight, it really happened over a span of six months so far. Guess what, I am STILL spending too much on eating out, it’s just too darn good.. But so far I have stopped spending hundreds of dollars because I have developed a strategy to help build my self control. 

Here’s a quote that I always remind myself of: “Live the way others WON’T now so you can live the way others CAN’T later!” 

Savings

I decided to talk about savings next because in my own journey I made the mistake of jumping right into investing first but had no savings… and in the world that we live in where almost everything is taxed- if you put your money into an investing account chances are you cannot pull that money out when you need it UNLESS you pay an early withdrawal fee, taxes, and other fees that your brokerage company might charge you. 

Savings are important because the more you have readily at your disposal to use, the better off to handle any unforeseen circumstances. 

Do you think saving money is hard? It might be. But if you answer “yes” to any of the following questions- then you don’t think savings is hard, you just don’t want to save…

Answer honestly: 

Do you EAT OUTt more than ONCE per week? 

Do you drink STARBUCKS more than ONCE per week?

Do you watch NETFLIX?

Do you have SPOTIFY PREMIUM?

How about AMAZON PRIME? 

Do you DRINK? SMOKE? VAPE?

Do you buy more than FIVE OUTFITS each season?

These were just a FEW questions that if you answered “yes” but think that saving money is hard tells me that there are a lot of pointless spending habits that you are developing or that you have already adopted. 

Now do not get me wrong- I am not saying you cannot enjoy your life, but if you have goals that you want to achieve you have to make sacrifices, you HAVE to make choices that will help you to achieve those goals and I fail to see how eating out more than once a week, sipping on starbeezy, and binge watching your favorite netflix show will help you to achieve those goals. 

Savings Strategy 

I want to make this as EASY as possible. If you want more, then read this book called, “Automatic Millionaire” because that is what I read that helped me to kick start my personal finance journey seriously. 

“PAY YOURSELF FIRST” is the entire premise of the book I just told you about and that is what I will discuss today. 

When you get paid every two weeks, are you setting aside at least 7-10% of your income that you DON’T touch and that you can put towards your savings account or investment account or new car down payment or even house? Chances are your answer was.. NO. That’s okay! Mine was “NO!” too… 

You might think it is hard to “pay yourself first” and that might be true, but also ask yourself this, “Am I living ABOVE or BELOW my means?” 

When I first started paying myself I would put 10% of my income into my savings account every time I got paid which usually only ended up being 50 dollars each check but I PROMISE that when you do it and make it a habit- suddenly several months go by and you have a nice $500+ dollar savings account. Now imagine that being multiplied by SEVERAL YEARS of ‘paying yourself first’. 

I would like to leave you with this thought as we close the ‘SAVINGS’ section: Andrew Hallam was your everyday teacher living in Canada and he had been working towards becoming financially independent since he was 19 years old. He lived SO FAR below his means that he would BIKE TO HIS JOB. DID I MENTION HIS JOB WAS 70 MILES ROUND TRIP? Oh, and he did have a car that he COULD HAVE used but he vowed to save every single penny he could! Andrew would even go to the beaches and FISH for oysters that he would eat with pasta and potatoes. I might have badly paraphrased his life experiences but my point is: HOW BAD DO YOU REALLY WANT IT? 

General Investing 

Alright here we finally are at my favorite part of this piece. There are SO many directions we could go, which is why titled this section, “General Investing”. 

Investing in Yourself

You know, if anybody asks me, “where should I start?” I am going to point at them and say “With you!”

What? Invest by starting with me? What?! I am trying to make MONEY here!!

I KNOW YOU ARE! Which is why it is SO IMPORTANT to start. WITH. YOU!

When I look back on my own journey and think about when I got started, I think about being a 16 year old going to Muncie Central High School who would wear suits to school because I always knew if I couldn’t be the fastest, the strongest, or the smartest- I could still be the best dressed… I was 16 when I started my journey and I say this because this is when I started to invest in my own personal development. Yes it was accidentally, I mean I was 16 for crying out loud, but I knew that there were things I wanted to do in my life and I knew that I didn’t have the know-how.. But somebody else out there did! 

I took my Christmas money that Aunty Syddie and Uncle Adrian always sent to us and went on Amazon books and literally typed in “business leadership”. The rest is history. I consumed book after book on topics about business leadership, HR leadership, personal finance, and general investing. To be honest I really was reading all of this because I was having these ‘brain explosions’ where I would read and then try to apply the principles in my own life and when they worked I was like, “Holy cow! Give me more!!”. 

I recognize books are not the same medium that everyone else will enjoy but I will always suggest for people, who have not already started their journey of personal development, to start by reading books and trying to apply the principles from those books in their own lives, and then try to teach the people around them about what they learned so that they can continue the cycle of success for themselves and their people! 

So here’s a CRAZY thought that I always told people which I think makes a great case for the fact that anybody can invest. Of course there is more to the situation but if you ever found me to be homeless and on the streets- you better believe that I will be in the public library busting my butt learning new skills and knowledge that I could use to leverage my worth, and essentially getting ‘off the streets’. Yes, easier said than done, but the point here is that- investing in yourself starts with making a CHOICE. 

If you were homeless, would you stand on the median of the busiest street with a sign asking for money, OR would you be working on developing necessary skills to get to where you want to be (in this example, off of the streets)?

I think that I have written enough by now and honestly I don’t expect any of you to have made it THIS far, but if you did thank you! I am not the expert when it comes to these topics but I know enough to hold my own, with that being said, I would like to tag the ACTUAL experts for those who want to learn more about how they can invest to achieve their goals :) 

The REAL Experts:

Personal Development: John Lenhart

Stock Trading/Investing: Andrew Hallam

Real Estate Investing/Financial Freedom for Everyday People: Michael Zuber

Automatic Millionaire: https://tinyurl.com/Automatic1Millionaire

My Pick- Personal Development Starter Books:

Nothing to Lose Everything to Gain- https://tinyurl.com/y6qkzx5e

Start With Why- https://tinyurl.com/y4cyzv5z

How Successful People Think- https://tinyurl.com/y6bfpydz