Okay, friends, I really am almost back. Almost. Thanks for hanging with me. And thanks to everyone who chipped in with a guest post! That really helped me. Here’s one more, from the Wealth Gospel, a new-to-me friend on the internet. It’s a fun read, and one I’ve peppered with pictures of my sister’s English Setter, because he’s my roommate and I don’t have to get his permission to put his picture on the internet.
The Ten Commandments of Personal Finance
1. Thou shalt not make money thy god
Don’t get caught up making money for the sake of money. Those who do so never end up happy. And speaking of happiness, the best way to keep yourself from making money your god is to give it away, which, studies show, actually helps you earn more money. Although Frugal Portland has taught us that doing so helps you realize just how blessed you are.
2. Thou shalt not worship thy stuff
Too many people have too much stuff. When they run out of room in their houses to put that stuff, rather than getting rid of it, they pay to store it. They do so with the best of intentions, thinking they’ll keep it until they need it. But you need to be honest with yourself. Is it worth it to pay hundreds, even thousands, of dollars a year to store stuff that you’re most likely to never use again? Get rid of it. Rather than pouring more money into keeping it, put it up on Craigslist. Then when the unlikely scenario of you needing it again happens, you can buy it again.
3. Thou shalt not use credit cards in vain
Unless you have concrete plans to pay off your credit card every month and only buy what you can afford, they should be avoided at all costs. Credit cards are not for emergencies. That’s what emergency funds are for. And don’t get caught in the minimum payment trap. Credit card companies aren’t doing you a favor by keeping them low; they just want you to pay more interest. If, however, you use a credit card for the only reason I do (rewards points!) and pay it off each month, you’re good as gold.
4. Remember to pay yourself first, and keep it holy
The only way Google, Apple, or any other large company got as big as they did is that they were able to keep their costs low enough that they could invest in themselves. If you’re not able to invest in yourself, do what you need to do in order to get there. Unlike companies, though, invest in yourself before you pay your other expenses. This can be in the form of an emergency fund, retirement savings, vacation fund, or whatever else. Make it be the first “bill” of the month and you’ll be surprised at how you’re able to still make it by cutting down the rest of your discretionary spending.
5. Honor the law of compound interest, that thy retirement may be long upon the land
Start investing in your retirement early. I started at 21 and have never missed that money. The sooner you start, the easier it will be to get in the habit of it and the law of compound interest will be working for you rather than against you. We’re talking about a few hundred a month when you start out in your early 20s versus thousands a month when you start in your 40s. Are you willing to give up a little instant gratification now to have it all later?
6. Thou shalt not kill thy relationships in the pursuit of money
The pursuit of money often comes at the expense of the pursuit of healthy relationships: with your partner, with your children, with your friends and other family. It isn’t until later in life that people who follow this path realize that they had searched for happiness backwards. While spending time in Mexico and Fiji on humanitarian aid trips, I recognized that the happiest people on earth are those with loving, healthy relationships. Even though the people I met had no money, they were some of the richest people I’ve ever seen.
7. Thou shalt not leave your family unprotected
If you have a family, nothing can destroy its financial security faster than losing you, whether to death or disability. Losing your ability to earn income can magnify an already heart-wrenching situation to make it unbearable. Having the proper insurance in the form of an emergency fund as well as life and disability insurance, can save your family a lot of pressure and heartache.
8. Thou shalt not steal from thyself
Strive to grow your wealth fairly. Gambling and get-rich-quick schemes are usually a form of winning at the expense of another’s losing. It can quickly turn into an addiction that can steal your hard-earned money away from where it should be working for you. I did customer service for a multi-level marketing company for 3½ years and took calls from countless people who were facing bankruptcy, but kept ordering product because they didn’t want to give up their chance at hitting it big.
9. Thou shalt not bear false witness
Don’t try to look like you’re something you’re not. Spending money on things to impress people you don’t really care about will only hurt you in the long run. According to studies done by the authors of The Millionaire Next Door, the vast majority of millionaires got that way by saving their money rather than trying to make others think they’re wealthy. On the other hand, someone who makes millions of dollars per year can go bankrupt faster than you can say blueberry pancakes. Just Google “bankrupt celebrities” for some examples.
10. Thou shalt not covet thy neighbor’s life
You’re probably tired of hearing about not trying to keep up with the Joneses, but it’s also important to stop coveting their career, their life, or the opportunities they got that you didn’t. I’m nowhere near where I thought I would be at this point in my life career-wise, and the one thing that has caused the most unhappiness with my situation is comparing myself with others – the guys I went to high school with and the guys I was in business school with. Be content with what you have and work hard to get to where you want to be, but stop comparing yourself with others and you’ll be a lot happier.