I wanted to let you all in on my loose plan as this blog develops. I aim to make two posts per week. One of which will follow a rough plan and stick primarily to finances, the other post may be entirely random so that I can share recent events or other time-sensitive content. I will also be adding more features to the blog soon (subscription, more images, etc…) so please understand the physical layout is a work in progress! Anyway, back on topic…today’s post is a bit longer!
So, when we think about finances and budgeting it is easy to look at it as simply restrictions on life or sometimes in a marginally better light as restraint. What we often seem to ignore is that someday there will (at some point) come a time when you (and I) are unable to work for a living. As such, the response should be to appropriately set aside enough resources to sustain yourself when that time comes. Likewise, those around you should do the same so you don’t suddenly have a massive financial burden due to their poor planning. The assumption here however is that we have enough resources in our particular situation to set anything aside, however that seemingly isn’t always the case for some. One of the situations that we should be aware of by now is the growing disparity in the distribution of wealth. Though I am not against CEO’s and others who have worked their butts off to earn income worthy of their efforts, I do firmly believe that all individuals capable of working for compensation and doing so at a full-time schedule should earn a livable wage. I don’t feel this is something that governments should need to get in the middle of, as it should be the business owners realizing it is in their best interest to simply compensate their workers with a livable wage and have one less thing the government needs to have unnecessary fingers in. This could go on forever. However, I would rather focus on what we can do here and now with the current system in the state it exists. If the state of the system changes, we can too. But, all we can actively control (though in a limited sense) is the here and now as it relates to our own finances.
Perhaps the first, or at least the most potentially influential thing is to consider how much money you are capable of earning. Second, and sometimes equally important is to consider how much you are capable of saving (setting aside) prior to any spending, also in that train of thought, consider which of your expenses are truly necessary and which of them are not. Lastly, and again equally important is the value you place on things (material or otherwise).
So how much money can you earn?! Again, some generic and widely known info. More education is likely to result in higher compensation. Certain fields of work are bound to pay more than others, and certain people (as awful as it is) are seemingly favored by the current system such that it is easier for them to make more than someone of a different ethnicity, gender, or other discriminating factor. One thing that I think is easier to ignore or forget though is the difference between active and passive income. If you don’t know what that means, active income is money that you do real labor for (such as your full-time job, or blog, or babysitting). Passive income is money that earns money without you hardly doing anything to it. In fact, all of your investments could be considered passive income (assuming gains are being realized). This is something that takes time and savings to create but should be included in your long-term goals to create. Once you have passive income on your side, you are no longer constrained to the limit of how much time can you commit to earning money.
On a related note, another way to make more is to work more (active income). Obviously we all only have so much time in a day but maybe there is work you can do that doesn’t require as much time or even as much active effort. Blogging for example, you spend time writing posts, setting up your website, maybe even networking with other bloggers and doing other tasks. But, so long as your content is bringing people in and they are repeatedly coming back and interacting with the site, that is where you are earning the money (if you have monetized your blog, which is a goal of mine). Consequently, maybe you only work on your blog 3 days a week. That does not explicitly mean you are only earning money on those 3 days. There are many other similar examples like this too. And again, this can be a very useful bit to acknowledge if you think you don’t have time to work another job and still need additional income.
As far as savings go, I would highly suggest that the mentality be that it is intelligent and proactive planning rather than restrictions or restraint. This change of mind can put you in a mental state where it transforms savings from a necessity to a true desire. One where you realize perhaps what is more important. For example, do you really need a $5.00 coffee before work, or could the $1300/year be better spent/saved such that it was available for something more meaningful? On that note, I brew my own coffee at home. Though I don’t drink it daily, I suspect my annual cost of coffee is around $100 including the mugs and single serve press that I use. Much more acceptable in my mind than other alternatives. Plus, that other $1200/year is still available for more meaningful things than a satisfying drink.
Closely tied to savings is examining expenses. We all have them, some crucial to survival, others not so much! Heck, even most of the “crucial” ones are much better than we actually need to sustain ourselves. But for most of us at least, life isn’t just about sustaining but finding joy and enjoying a few nice things if we can. For example, where I live, I could have easily rented a considerably cheaper apartment. But, knowing this situation is temporary and knowing that our financial picture can survive undamaged with rent being a bit higher, we decided to spoil ourselves for the short time we’ll be in an apartment. The key being that we realize we are spoiling ourselves, not that we deserve the level of comfort we currently have. Likewise, people around the globe have expenses both necessary and not. It is entirely your choice on what is truly necessary as that depends on many factors. But, as much as blanket statements are hard to apply here, as consumers we need to be careful what we tell ourselves is necessary as those decisions impact so many aspects of life. One expense that I struggle with is cell phones. As much as I use and legitimately need what I pay for (because I need it for my job) I am still disgusted by the cost. Especially because the alternatives require we sacrifice some features or at least sacrifice the quality of features. There isn’t much room for improvement in my situation unless I somehow didn’t need my cell phone for work anymore. If that was the case, then perhaps a switch in providers and services could yield savings around $100 per month. Essentially balancing out to free coffee every year!
Lastly, is the value we all assign to things (whether material things, experiences, or maybe something else). As it has gone viral, a post on Facebook by a young lady dying of a cancer recently caught my attention as I have thought similar thoughts over the past few months during my recent and significant health struggles.The woman’s post is quite extensive and covers a lot of ground, but could be very crudely reduced to say, quit worrying about the insignificant shit and do something about the rest of it. Enjoy your life, even though it isn’t perfect and try to make a difference. The reason I bring her post up in this context however is because of her perspective on material goods. She says, “It makes you think how silly it is that we think it is worth spending so much money on new clothes and ‘things’ in our lives.”. The context being that we all spend too much time and effort spending on ourselves when in the end (on your deathbed) hardly any of that will appear to be important. Now, I’m not saying researching purchases should be avoided! But prioritize your life appropriately. If it takes you ten hours to research what fridge to buy, you’re probably going to be spending more than what’s necessary on it. Instead think about how much of that could be saved or even spent on something meaningful for others in your life. After all, what’s going to be more easily forgotten on your deathbed? That $200 dress you got or maybe donating that sum to a local food bank or buying/making a gift for your neighbors? Heck, put aside the money aspect of that example, maybe those hours of research would have been more memorable at your kids soccer practice, or learning a new skill, or simply being with people you care about.
A final note (and yes I know this post is very long!), I want to be clear that my inclusion of death in this post is not to be mistaken as some sign of an interest in death or weird obsession with it. Rather, we are all humans who will inevitably die at some point. I for one would like to think that death itself doesn’t strike fear in my heart. My fear however is that my life could have been spent more wisely and more to the betterment of those around me. As such, I don’t want any of us to forget that we don’t know how much longer we have. That shouldn’t scare us, instead it should motivate us to create a more meaningful life while we have that precious chance!