There is definitely a MINIMUM for basic money smarts.
Say what you want, but it kind of goes like this:
- Don’t go into consumer debt for stupid, unnecessary items that you’ll inevitably forget about
- Save 10% of your income (whether you choose to read that as gross income or net, is up to you)
- Don’t spend more than what you make and live a lifestyle you can’t afford
- Make as much as you can (negotiation-wise, not necessarily taking on more jobs)
- Don’t be a parasite on others especially those who can’t afford it – pay your fair share, you weasel
That’s about it.
I know you’re thinking:
WAIT THERE IS MORE. You’re lying.
There is SO MUCH MORE than just those things for money smarts.
But that’s really it at the base of it all.
All the rest that I, and other PF bloggers talk about, are just variations on the theme.
Some want to save more than 10% of their income (I do, anyway) for instance.
However if you have been a PF blogger for a long time (for me, 6 years and counting, on my end!), you will start to realize we all fall into different, weird little camps.
Kind of like factions.
We rail against each other, have our own (sometimes) petty arguments, and communities within what is a larger community.
If you’re a first-time reader of PF blogs, none of this will be apparent.
You’ll just all think we’re #$*&#% weird because we’re arguing over whether or not to save 10% of our gross or net income, and what falls under “Housing/Shelter” in a budget.
All of the above are all just opinions of individuals, in the end.
The only facts will be what actually happens with the money.
WE’RE ALWAYS GIVING OPINIONS, AREN’T WE?
What WILL be apparent is we are always complaining about any one of the given topics:
- Bloggers are being stupid because they are not clearing their debt 100% (even student debt)
- Bloggers being stupid by going on vacations, or buying frivolous things without being debt-free
- Bloggers who are dumb because they WANT to upgrade their lifestyles & are against being frugal
- Bloggers are being cheap and ridiculous in an effort to save what are fractions of pennies
- Bloggers being short-sighted and focusing only on saving money but not on making more money
- Bloggers wanting to do fun stuff with their money, and getting judged by the PF community
- Bloggers who save, but then are berated for spending it (umm WTF Is money for anyway?)
- …and it goes on and on and on, about all the things that everyone else is doing wrong, with their own money!!!!
We’re all a bunch of petty, annoying, hotheaded bloggers sometimes.
(Myself, included. But not you. You’re probably a nice blogger and reader if you’re reading this.)
What I think we all fail to step back and recognize sometimes, is that priorities are what matters.
What you decide to do with your money, is where you have decided to put your priorities.
It’s as simple as that.
From that, we each have different limits and thresholds, and if we were all the same, it’d be a pretty boring world to live in.
THOSE WHO DON’T WANT TO LIVE LIKE MISERS
Sure, I may not personally agree with spending $5000 on a vacation when someone is $50,000 in debt, but if they’ve decided that going to Hawaii is something that they want to save for, in lieu of clearing their debt and paying less interest, by all means GO FOR IT.
I am certainly not going to encourage them to go on that vacation over paying their debt, but that’s MY opinion, but I’m not going to barge into their home and start berating them for spending $5000 to go on a vacation when they are paying 18% interest or $9000 a year on their $50,000 debt.
Their priority is to have that vacation, and continue paying their debt for a year longer.
What’s another 365 days anyway?
They should only know what that vacation is costing them in terms of lost time, a longer debt horizon, interest payments, and be aware of it if they aren’t already.
Other than that, it’s their money.
This is where the distinction comes in: IT IS NOT MY MONEY.
It’s your money, and for this reason, I don’t give a damn because I don’t have to give you anything.
THOSE WHO WANT TO LIVE LIKE MISERS TO BECOME RICH
I may not personally agree with living in a cardboard box under a bridge like a troll, just to save on rent, wearing some flour sack that I’m trying to belt to make it look chic while I try to make this trolling-for-tolls thing work, but hey, if you want to go ahead and do that.
GO FOR IT!
If you set your priorities to give up basic pleasures of shelter, warm showers and eating something other than ramen and the small fish that you are able to catch under the bridge, it’s your deal, not mine.
Then if you decide to blog about this as “HOW I TROLLED MY WAY UNDER A BRIDGE TO $1 MILLION IN UNDER 10 YEARS” and you end up making a ton of money off it, I couldn’t suddenly be envious and jealous that you became a millionaire.
I didn’t want to live that life, and I didn’t choose to.
You chose to do it, and in doing so, you worked for it, and I couldn’t be happier for you.
(Seriously. Troll hair and all.)
You set your priorities, and you made your own goals a success (and possibly getting gut rot and nutritional deficiencies), but I am sure as heck not going to try and replicate that life for myself.
(I enjoy warm showers, eating fancy food, and at least sleeping in a slightly heated room a little too much.)
I AM SOMEWHERE IN BETWEEN THOSE EXTREMES
I am not one, nor the other. I am both, at different times.
THE MISER IN ME
I can’t believe when I was getting out of $60,000 of debt, just how cheap I became at the end.
Actually, not cheap. Super. Duper. Miserly Frugal.
I only spent money on train tickets, food, rent, and that was it.
Take for instance the fact that my pants were getting too big for me, so I just pinned them tighter and wore a belt.
I didn’t want to spend a single cent on anything.
I went pretty far, now that I think about it, but to me at the time, all I could see was clearing that debt to $0.
THE FRIVOLOUS SPENDER IN ME
I didn’t work for most of 2011 and 2012 because I didn’t really want to.
Everyone is screaming bloody murder at this point because HOW CAN YOU NOT WORK for 2 years!?
Well, my priorities were traveling (before kids is always best), figuring out where I wanted to permanently live, and taking the time that I never had as a kid.
(Me, chilling in Paris)
I hadn’t stopped working either part-time, full-time or doubly full-time since the age of 7 when I had my first paper route on the weekends.
2011 and 2012, were the first years I had taken it easy in terms of “work” for the first time in a long while.
Then I held 2 jobs — I created a consulting business at the age of 16, alongside working part-time in a fast food joint.
At 19, I continued my consulting business, moved out, and decided I had to live for cheap (I had no choice), so I took on taking care of a building to subsidize my rent in return.
I also decided I needed another job (because I wasn’t busy enough) and took on a third job part-time on campus, all while attending business school full-time, and graduating with honors.
I found my career at 22, had to give up the building job (I wasn’t around enough, as I was traveling for work), but continued freelancing on the side, because I could do it on weekends when I was back.
Then I quit that career, turned into a freelancer full-time and now I have my perfect work-life balance.
It makes me self-punish sometimes out of guilt in between contracts, but that’s my problem, not yours.
I can only be aware that I’m doing it to myself, and try not to freak out.
MY PRIORITIES CHANGED TO HAVING A BETTER WORK-LIFE BALANCE
Now I work when I can, live on less so I don’t have to worry or work so much, and chill out in the downtime.
It’s not that I can’t work hard or that I’m lazy. On the contrary, I work very hard when I am on a contract to be the best consultant they’ve ever had.
It’s just that I choose not to run on all cylinders all the time.
It was my choice, even though I pretty much gave up 2 years of making a lot of money (maybe I lost out on $200,000, who knows?), and took the time for myself instead.
Why? Because I could.
Why else? Because I wanted to. So STFU.
With my savings well over the 6-figure mark, at the age of 27, I decided that I could live a little, enjoy my life a bit more and stop trying to do everything and keep myself busy 24/7.
So I did.
I still have my whole life and my career ahead of me to work. I don’t need to work like crazy, and then die of a heart attack at 45, surrounded by a pile of money I didn’t even really plan on spending in the first place.
As a result, I definitely afford everyone else the same luxury and benefit to be able to do whatever the hell they want with their money and their lives.
BELIEVE IT OR NOT, MONEY IS NOT THAT IMPORTANT
Money doesn’t mean the same thing to everyone, and it certainly doesn’t mean the world to me. I care about it, but not obsessively.
Isn’t it all kind of relative anyway?
Have we all forgotten that billionaires are jealous of other billionaires who have more than they do?
If you recall, there was a German billionaire who committed suicide during the downturn of markets because his net worth dropped. He still had millions, but the loss of that money on paper overnight, caused him to mentally snap and hang himself.
Money didn’t change a damn thing for him and his perspective. He dropped in status, and that made him suicidal.
PF BLOGGERS BLOG IN A MICROCOSM AND WE AREN’T “NORMAL”
It’s the same thing online, reading all these PF blogs, just with less 0′s tacked on at the end.
You have to understand that this PF world is a small, abnormal community. We are not the norm, we are the exception.
So what we do, is relative to each other.
Earning $100K in a small town where people earn $20K, makes you feel like a queen.
Earning $100K in a city like NYC where people earn that in a day, makes you feel like a pauper.
In reality, all I want, is for everyone to learn more about their money, and to not make stupid, easy-to-fix mistakes like being lazy and refusing to walk to your bank’s ATM, so you get slammed with a $1.50 fee to withdraw cash (or more!).
Once you’re fully out of debt, and saving on a regular basis, your net worth becomes a number, after a while, and it doesn’t change how you feel inside or how others see you.
If you’re already an unhappy, lonely person, with a million dollars in your bank account, you’d still be an unhappy, lonely,person but now you just have a million bucks more.
Some people don’t want to sacrifice everything to have lots of money, they’d rather sacrifice a little, and be in debt longer, and they feel good about that choice.
Others, want to sacrifice it all in the short-term to see the rewards in the long-term, and they feel good about their choice as well.
Either way you want to be or you want to act, I don’t really care.
How much you have as a net worth doesn’t affect me at all.
I’d definitely wish and encourage you to have a positive one, but otherwise, if you’re going to turn into a jackass because of it, I’d rather you stay poor and awesome.
YOUR money is YOUR responsibility, and I can’t claim to (honestly) care any more than that.
(Unless of course you pay me to care or have otherwise written me into your will.
For the record, I offer a wonderfully random Money Caring service at about $150/hour if you’re interested.)
So can we all just STFU and let everyone do what they want?
You can always tweak and do more to improve your situation, but with each tweak, comes a changing of priorities and sacrifices to some extent.
If you aren’t willing to prioritize your debt over your life, that’s your choice, not mine.
If you are willing to give up a lot of fun things in your life to save money, that’s also your choice, not mine.
To me, if you are out of debt, and/or on the way to being out of debt, aiming to retire with a decent chunk of money instead of a pathetic $100,000 (which comes from 40 years of saving less than 4%), and you aren’t on welfare and bitching about it, I’m happy for you.
If you are funemployed, and decided to take some time off to travel around the world while you’re young without going into debt, (and are able to accept almost any kind of living condition of hostels abroad), I’m happy for you.
If you decided to take on a minimum wage job or two to pay for your bills and debt, while you wait for something better to come along, I’m happy for you.
(And kind of proud too, if truth be told; your pride is a hard thing to swallow when you take a job you think is beneath you — it’s honest work and nothing to be ashamed of.)