Friday, November 18, 2011

becoming financially responsible

This is my new years resolution, and it will be continue to be my new years resolution until I actually learn to think about my money differently. So what have I done so far? I have linked up to, which I love, is easy and good for visual people like me. I have begun saving 10% NO MATTER WHAT. I take it out in cash and put it away. Yes, I hide it. I have found that the more concrete and less abstract the notion of my money is to me, the better I do with taking control of it. So until further notice, I'm taking cash out and saving it.
I have also figured out something else. While I'm saving for my emergency fund, I find that I have a lot of emergencies that aren't really emergencies. They are predictable, I just don't take the time or put in the effort to plan for them. It's sort of the old "hear no evil, see no evil" idea...which I seem to be an expert in when it comes to money.
So emergencies that are true emergencies? Losing your job, a health crisis, transmission on the car going out. That sort of thing. But the emergencies I have should not be emergencies at all, but planned expenses budgeted in proactively. For instance, when my dishwasher goes out, it will not be a surprise, but do I have a place in my budget for new appliances? It's going to happen, sooner or later unless you have brand new appliances, so it should be a planned expense. Personal property taxes: I always get slammed with this and it's another "emergency" or "surprise." No, I have simply decided to not think about it and have failed to plan annually to put it into my budget. How about the new roof I'll be needing. I have a home, I pay a fairly hefty mortgage, so I am going to need a home maintenance category that I contribute to monthly. If I don't, I'm going to be paying out a new roof on my credit card.
I really think that I learned the wrong things growing up, or learned nothing at all, or just didn't pay attention, but I want to raise my kids thinking about these sorts of things. Making money management a part of their upbringing,and to do that, I have to fundamentally change the way I have thought about money for the past 3 decades or so. I'm working on it. It's not easy, but I'm going to learn to improve this part of my life so that my money or lack thereof does not control my quality of life.