Dollars and Sense — Part 1

What’s the best financial advice you ever got?

We live in a time when financial freedom is a dream rather than a reality for most Americans.  Debt has become a way of life, a reluctant but inevitable cost of fulfilling wants and desires.  We have fallen under the beguiling spell that we can borrow our way to happiness. We swim in a pool of red ink without a life preserver.  And we’re drowning in it.

Charles Dickens is quoted as saying, “Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.” 

Financial guru Ron Blue said much the same, “Spend less than you earn and keep doing it for a long time.”

I thought of these two quotes when I stumbled across a July 23, 2019, Wall Street Journal (WSJ) article, Best Financial Advice I Ever Got.  This article shared the results of a survey of financial experts on what financial advice changed their lives for the better. As I read through the variety of responses, 

I began to recall the advice I had received over the years. And how I wished I had put that advice into practice sooner than I did.

It is not easy, especially as a young adult, to sort through the myriad of available financial advice. Modern-day “snake oil” salesmen are lurking in the advertisements of every Facebook and webpage screen. The explosion of ads in social media reminds me of carnival barkers at a local fair hawking their games to win the overstuffed doll. Beware of the financial cure-alls — cash-back credit cards, rebates, refinancing offers, and reverse mortgages — they can be minefields to navigate.  Learn to discern.

My personal education on financial matters began in earnest during a season of credit card madness. We had overspent one Christmas using our credit cards. Then ear infections ran through our five children, and the prescriptions needed were outrageously expensive. The situation worsened when our washing machine broke down, and the Air Conditioning needed a new compressor. The easy fix of credit cards proved a painful learning experience. Financial freedom and credit cards do not mix. Credit card interest rates are designed to keep you in financial bondage. Years later, when we listened to personal finance expert Dave Ramsey spout his financial gospel of “emergency funds” and “debt snowballs,” we soaked in every word. With our credit card fiasco fresh in our minds, we embraced the conservative spending/saving habits we should have been doing all along.

That experience prompted me to seek out and document golden nuggets of wisdom — financial-related tips and quotes — as a resource during times of temptation. One of our favorite Dave Ramsey quotes soon became our daily mantra:  

Debt is bad, Saving is good, Giving is fun, Stuff is meaningless!

Reading this WSJ article about financial advice brought back many memories —  especially raising five children on a single income, the cost of car insurance for teenagers, and sending those five through college.  Looking back, I am still stunned to realize we had 14 straight years with at least one child in college and several years with two or three.  Yikes!   

What financial advice and philosophy did we follow that helped us survive and be in a position to retire with confidence?

The road to financial hell is paved with good intentions. The way to financial peace is located at the corner of Word and Wise.  What do I mean by that?

Come back next week for part 2 of Dollars and Sense.

Photo by Sharon McCutcheon on Unsplash