Here's a great comment from a new reader:
I just found this blog today, and I'm really confused. The title seems to suggest that this is a blog of good advice for people trying to save money and be thrifty. Overall, though, it seems the posters just end up in the same pitfalls and unpleasant surprises as anyone else. Viz the recent pair of postings of “don't get an extended warranty” followed by “crap, my non-extended-warrantied laptop just broke.” Likewise, here we have a story about new homeowners who are intelligent and took the time to do some due diligence and still got screwed in the end. It doesn't seem that the posters' own experiences encourage the following of the posted advice here.
Why bother with personal finance?
Those who practice sound personal finance experience the same pitfalls and unpleasant surprises as everyone else. Laptops break. Mortgage brokers make mistakes. Roofs leak. Basements flood. People get sick. Kids break things. Shit happens.
Sound personal finance prepares a person to cope with life's surprises.
I didn't have an extended warranty when my laptop broke, but I did have funds saved that I could have used to repair or replace it if needed. If the same thing had happened two years ago, I would have needed to use credit in order to take care of the problem. (In the end, this time I was able to fix the problem myself.)
There will always be pitfalls, no matter which path we choose. They key is to choose the path that is most likely to lead to success. I believe I've done that. And I want to share the setbacks, as well as the achievements.
Most of the changes I advocate are small. Taken individually, they appear inconsequential. But on the whole, over the course of months and years, they have a significant effect. We're all human. We will make mistakes along the way. But so long as we stay focused on our goals, we're going to reach them.
The steps I share here will lead to financial security. I can testify from personal experience that in as little as six months, a person can see a dramatic turnaround in his financial situation. All it takes is a change in an attitude and a commitment to use money wisely. I am two years into my own personal journey, and I'm shocked at how much better off I am than I was when I started.
Author: J.D. Roth
In 2006, J.D. founded Get Rich Slowly to document his quest to get out of debt. Over time, he learned how to save and how to invest. Today, he's managed to reach early retirement! He wants to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you reach your goals.
Exactly right. One of the things that has most motivated me to get on top of the financial pile was the fact that when bad things happened, I was totally blind sided. We were consistently thrown into debt spirals as soon as something that cost more than about $250.00 went wrong or broke. Being sound financially is about being able to handle what life throws at you instead of being thrown by it.
I love to do the “little things” because to me, the big things are too hard to do or to think about. Saving money shopping wisely for clothes or for groceries is something that I can see work right away. For “big” things, I now have an emergency fund for my pets. Still working on one for myself. 🙂 Last summer my horse managed to rip the lining out of his nose. None of us, including the vet, could figure out how he did this or where. He lives in a safe pasture with safe fencing. But $180 later, I… Read more »
Life is always unpredictable. Personal finance is part of a general lifestyle, to me, that prepares for the unpredictable by living simply and sensibly the rest of the time. You can never prevent bad things from happening. I’m not after ‘getting rich’ so much as ensuring that I can live a rich and satisfying life without worrying about being able to pay the bills, even if I get hurt or sick. It’s about spending a little bit of time with learning and preparation in order to save myself from the big stressors if I lose a job or have a… Read more »
With me it seems as I get older it’s harder to plan financially. My advice to young people would be do it now because it doesn’t get easier.
I think it’s amazing, but I read something today about playing poker and made a post on my site. The point boils down to how each hand can be a winner or loser, but the key isn’t to just give up. You have to minimize the losses on the losing hands and maximize the wins on the winning hands. Over time most people good and bad luck seems to balance out. One month you may get a raise and the next you get a flooded basement. Personal finance thought and planning allows you to take the maximum advantage of the… Read more »
Exactly – managing your finances properly allows you to handle the setbacks and the unexpected without it causing undue hardship.
It also allows you to take advantage of situations that you might not be able to because of “money problems”.
Most people think being “financially secure” is the same as being super-rich. I think it is more the idea of not having money (or lack of) rule your life. You don’t have to be really wealthy to have the comforting feeling that you can handle an unexpected car reapir without it turning your life upside down.
I think another point to add is that this site and blogs like it are about sharing personal experiences related to personal finance.
The ocmmenter indicates that the authors of GRS fall into the same pitfalls as everyone else. And that’s naturally true, what separates the PFBlog community is that we share our experiences because we’ve learned from them and hope that others can learn from them too.
NG
One of my favorite books in this regards is Thomas Schweich’s “Crashproof Your Life”. He makes the point that few of us believe bad things will happen to us. Of course, they do. The goal is not to prevent the unfortunate accidents of life, but to build a strong financial structure to minimize the effects. Great book.
Look at it this way. Something unexpected happens (it always does if you live long enough) and you need money. What if you could go to the garage and sell everything in it for the full retail price you paid for it, plus tax? What if I told you that you could even get 8% on top of the value, compounded annually from the time you bought it. Yep. The Soloflex, the Thigh Master, the Ginsu Knives, the blenders, Foreman Grillers, sports gear…all of it! Now you’re starting to realize how your life differs from “comfortable” people.
Very well said. Personal finance education helps one be better prepared, reduce risk, secure the future, and enjoy an improved sense of well being.