In two weeks, I'll begin what I hope is my last year working. I am a proud public-school teacher and have been for 34 years. Because I am a poorly paid public servant, money, or the lack of, has often been a concern in my home. Fortunately, we have never had to go without our needs, just some of our wants. We've always been able to pay our bills, so we've never had the electricity or phone disconnected for nonpayment. We've always had enough food to eat.
Why am I now so concerned with money? Because I realize just how fragile my family's economy is. In one year, my salary will be reduced to 46% of what it is now. I'll be 57 when I retire which a long way from that old-age savior -- social security. Ten years ago, when I finally figured out that I would experience such a shortfall, I started saving, but it's something that I should have been doing from day one on the job. But I was 22, newly married, with house and car and then daycare payments; retirement seemed like something I'd never reach. How short-sighted was I?
What would I do differently if I could start over with saving money?
1. Never, ever, ever get a credit card. Those cards are the spawns of Satan. They lure you in by making you think you really need something, but when the end of the month comes, you usually have buyer's remorse. If you can't pay cash for something, wait until you can. Saving for something, especially for a long period of time, makes you value an item even more. Presently, I do have a car loan and a house payment, which I know is against the Dave Ramsey philosophy, but those are the only two.
2. Save something each month in an account you can't touch. Tax shelter annuities are great for doing that. You can lock away money that will be there when you retire.
3. Follow a budget. I'm not the best budgeter. My husband says that I spend what I make and that's mostly true. If I were 22 again, I'd follow the envelope method, dividing up how much money I'd spend on items throughout the month. I know this method works, but I'm not disciplined enough to get through a month without digging into another envelope.
4. Be selfish. I have mentioned in earlier posts that I'm an enabler. I like to help people which is not necessarily a bad trait. What is bad is helping people by giving them money and believing that they will change a behavior because of it. I can't tell you how much money I've given to addicts over the years, thinking that if I buy them this car, this boat, this whatever, they will change their behavior. Finally, I have learned; however, it wasn't until I accumulated a great deal of debt and was left alone to get out of it.
5. Be careful with a debit card. When I wrote checks or paid cash for everything, I had a much better grasp on where my money was going and how much I had. I balanced my check book register every morning while drinking my coffee. Now I have gotten lazy by swiping that debit card and having the bank write my checks for me. Instead, you should be aware of how much money you have at all times. To help keep up with your withdrawals and deposits, download free printable registers or use software like Quicken or Mint to keep up with your deposits and withdrawals.
Saving money is vitally important. Start young and respect your money at all times. I wish I had taken this advice when I was 22.
What money-saving advice do you have for those beginning a career and/or for those ending one?