One of the greatest challenges that I see many face (and have experienced myself) on the road to financial self-reliance is overcoming the temptation to put off giving to those who are in less fortunate circumstances. Depending on my current financial situation, my ability to give to someone in a position less fortunate varies. However, I'm realizing more and more that it's important to develop an attitude of giving regardless of my current financial situation . It's all about having proper perspective.
I came across an great article over on
The Writer's Coin which describes an experience the author's wife had with a five-year-old aspiring artist. The boy was selling his paintings outside his house, much like I tried to sell lemonade when I was a kid. Unfortunately, the author's wife only had about 25 cents on her, even though the boy was trying to raise $20. When the boy realized he had more money than her, he started offering her his money because in his mind he obviously had more than her, so why shouldn't he share. In the article, the author poses the question of "At what point does the little boy’s logic disappear and turn us into greedy, money-obsessed adults?"
Whatever situation we might find ourselves in, chances are we know someone who is worse off than we are. I certainly don't think we should just hand out money to whoever is walking down the street who looks in need (and become enablers of individuals who take advantage of generosity, only to find themselves in the same circumstances down the road). However, I find that looking for opportunities to give helps me to remember that as important as money is, at the end of the day, it's really just a means to helping those around me.
My wife and I set aside a portion of our income each month to give to those in need. While you might wonder why we do this, I've found that doing so helps me be more compassionate for those who may have fallen on hard times and remember that the world doesn't revolve around me. Especially during the current economic situation, countless examples exist of good and honest people, who find themselves out of work struggling to make ends meet. I find giving to a reputable charity or to someone you personally know is struggling can bring a lot of happiness in life.
And it's amazing that when you pay it forward how often it comes back to you tenfold.
I've been thinking a lot lately about goals and came across a
great article by Jonathan Clements over at the WSJ about reasons for saving and managing money effectively. It's a nice read and reminder to help keep things in perspective. In the article, Clements cites three reasons for saving and investing:
- If you have money, you don't have to worry about it.
- Money can give you the freedom to pursue your passions.
- Money can buy you time with friends and family.
If you don't have something you are striving for financially, it is easier to lose sight of the big picture and then becomes harder to maintain sustained perseverance. Having a goal in mind is critical in delaying current desires to achieve long-term goals and helps develop greater self-restraint and financial maturity.
J.C. Penney, Founder of J.C. Penney's Department Store
J.C. Penney, founder of the well-known department store stated the following:
Give me a stock clerk with a goal and I'll give you a man who will make history. Give me a man with no goals and I'll give you a stock clerk.
Whether it's in regard to one's personal finance or some other aspect of life, everything will not always be easy or ideal. While having a goal gives direction and motivation, life's challenges times which can include putting on hold, for a time, certain goals. There is wisdom in approaching goals as measuring sticks, not sticks to beat ourselves up with. If a goal is having an undesired effect (i.e. causing discouragement or demotivation), this is a key warning sign the goal might not be currently realistic and should be adjusted.
While some of life's experiences can be discouraging and frustrating, it is a sublime experience to meet adversity, endure, and ultimately overcome. I take comfort in Napolean Hill's words in which he stated that "every adversity, every failure, every heartache carries with it the seed of an equal or greater benefit."
When my wife and I got married, I placed our honeymoon on a credit card. I was still in school and we didn’t have a lot of disposable income and I deemed putting it on credit cards as not ideal, but necessary. Largely due to the wisdom of my wife, we tightened up the belt and paid it off after several months.
This experience has served as a very valuable lesson for me about staying out of debt. Before that time, outside of school loans, I hadn’t experienced the weighty feeling of debt. After we paid the last payment on our honeymoon debt, I realized how nice it was to not have a credit card payment. Since then I’ve become much more debt averse and now see the wisdom in living life debt free. J. Reuben Clark eloquently stated that
Interest never sleeps nor sickens nor dies; it never goes to the hospital; it works on Sundays and holidays; it never takes a vacation…Once in debt, interest is your companion every minute of the day and night; you cannot shun it or slip away from it; you cannot dismiss it; it yields neither to entreaties, demands, or orders; and whenever you get in its way or cross its course or fail to meet its demands, it crushes you. - LDS General Conference Report, April 1938, 103.
Getting spending under control is the first step in the search of financial freedom.
I’ve found the better I understand where my money is going, the better I’m able to control those spending urges. Several online tools are now available for those of us who have never been very good about recording each purchase in our check registers. Using one of these tools you can import transactions from your online account (automatically if your bank is supported) from each of your financial institutions to have a global view of your finances.
My personal favorite of these services is
Mint, although there are others (
Wesabe,
Geezeo,
Buxfer). What I love about tools like this is that I can go in and assign categories to each of my purchases and easily understand where I’m spending money. I’ve looked at Wesabe and Geezeo and they just don’t seem to work for me quite as smoothly as Mint.
While it matters less which tool or system you use, of paramount importance is actively monitoring where you spend your money. If you are anything like me, the first couple of months you track your spending, you’ll be surprised at some of the places where your money is going.
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