Hey it’s that time again to discuss all the great and fun things about money. For starters never love or obsess about money, but love the freedom and usability money can bring. How can people avoid disrespecting money? Well it’s quite simple and it is basic personal finance mumbo jumbo we have all heard in the past.
I will dig into this topic and reveal all the ways regular folks are disrespecting money everyday. Do you want the best use of in-flow and out-flow for all your income? Well if the answer is yes then you can continue reading because I will instill a few nuggets of wisdom in this blog for all of you. Disrespecting money can happen in many fashions and it is up to you to put a halt to it once and for all. This is not a post about the irresponsible football player who goes bankrupt or about someone making over 200K and still living paycheck to paycheck. It is about simple ways anyone can stop disrespecting money and begin using it for the tool that it really is.
The first sign you are disrespecting money is not tracking it on a month to month basis. Do you know what will happen if the CFO of any said company began keeping shoddy records of where the organizations money was spent? He would be fired by next Friday. Do you want to be fired also because you say you’re too busy to track your expenses? It’s pretty simple to set up a system to track your expenses. Mint.com is a free service to help you get started. Pen and paper is another system to help you find all the lost money prior to you setting up a budget. If you care about your money you will find a system that works for you. I have used in the past spreadsheets, pen and paper, and mint.
The second sign you are disrespecting money is not paying off debt like it is an emergency. Do you know that if you hold on to debt longer than you have to that you are paying more in interest? Why would anyone in their right mind want to pay an already rich company more money? Because your making money on borrowed money, baloney. Pay it off and forget about a dumb spread between the loan payment and your pie in the sky returns from invested money. The secret is to grow cash flow the smart non-risky way, and forgo playing loan arbitrage games.
The third sign you are disrespecting money is you’re not investing it. The power of investing is a proven fact, and if you are not on board you are missing out. Hundreds of thousands of articles have been written to the time tested model behind invest early and often to get the compound effect strategy started. Someone who invested 10 thousand at 20 needs a heck of a lot less money to invest by 40 in order to secure a great retirement. That money has been working overtime for those folks who started early. The ones who began at 40 well I wish you all the luck in the world. If you begin today you will not regret it later. –TradeKing.com
These are the ways people should avoid disrespecting money.
The signs above are all red flags that can be corrected for anyone looking to do good by their money. We all take things for granted and it all boils down to excuses. Why let anyone else’s excuses affect your money behaviors? It doesn’t have to be complicated because the information is already out there for millions to learn.
The secret is, when you begin to see the signs as a problem and not as an excuse to live life. I know you know at least one person who does not manage money, does not pay off debt, and does not invest because they are living life to the fullest. I want you to tell that person it is time to stop disrespecting money, because money is finite. If you do not grow it every chance you get you can lose the power it can supply when handled correctly.
We all have heard you only live once right. What this phrase really means is your spending 100% of your income to have fun. Do you know if you adjust your spending a little bit, you can change your future dramatically? How you can do it will be the easy part, consistently sticking to it will be the hard part. Take 50% of all your surplus money and use it wisely by paying off debt or investing it. First and foremost you want to always eliminate debt, and then invest. The next thing you can do is just make it repetitive month after month. That little sacrifice will go a long way to change your financial behaviors and allow people to respect the dollar dollar bills y’all. If you handle money correctly you will soon understand that money is to be respected and never wasted.
Comment on how can people avoid Disrespecting Money?
Rich Uncle EL
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I try to respect my money in the most basic ways to instill that idea of respect on every level. For example, I try not to leave it strewn about and crumpled up, but nicely organized in my wallet.
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That’s awesome Stefani, everyone must respect the dollars and make the best use out of each one.
Hmm, I hope I'm not disrespecting money. I'm definitely investing my money so I'm good with #3. I don't really keep track of our money as in budgeting each dollar, but we have determined how much we should save each month and make sure we hit does goals. Both my wife and I don't spend frivolously for the most part…but I think we can optimize better by keeping a closer eye on our money. As for #2…credit card debt or any high interest debt is a no no…but I do have low interest student loans…some as low as 1.6% I prefer to invest my money rather than paying those loans off.
I understand that money is a personal thing and everyone has a system that might work for their situation. From my experience by tracking money it helps to utilize every dollar. After doing this I found that I spend less, and I am able to apply a lot more towards past debts. As of right now I am focused on student loan elimination, and not investing. For my personality I feel best when I am debt free, it gives me a greater peace of mind. After that I can invest more dollars because I will have no debt.
My recent post Can People Avoid Disrespecting Money
Respect for money seems to come with age. It seems that from a young age we feel invincible that think that our earning power will only increase over time so why care or respect the power of money. Of course, the harsh reality of life smacks you on the side of your head eventually and you wake up one day and realize that your should have respected/taken care (managed) your money a little better. The reality is most people are guilty of 1, 2 and 3 from your post.
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I agree with everything you mentioned, age plays a big part in how we manage money. I was very good with my money from a young age and I believe people’s personalities plays a similar role as age does with personal finance. Thanks for the comment.