Finance Post: My Money Philosophy

A few months ago I purchased a financial advice book called Why Didn’t they Teach me this in School by Cary Siegel.  There is an accompanying workbook with exercises meant to assist the reader in learning more about personal finances.  In order to use my free time a little better and to get the most out of writing again, I have decided to blog the exercises from this book that I think are useful to me.  Some really are decent blogging prompt.

Exercise 1: “Write about/discuss your money philosophy.  Are you a spender or a saver? If someone gave you $10000 to spend on whatever you want, what would you do with it?”

It should probably be said right from the start — I am notoriously bad at managing my money and I have always been a spender, to my detriment.  My family was well off and inclined to spoil me, so as a child I never wanted for necessities or luxuries.  We went on nice vacations, I had lots of toys and lessons and sports and books to read.  I never had to worry about money.   As a teenager, this trend continued.  My parents were what you would now call “helicopter” parents.  They were strict and wanted to exert a significant amount of control over my life: part time jobs were not allowed.

Unfortunately, my lack of experience with money as a child and adolescent didn’t serve me particularly well.  I didn’t learn money management through osmosis and, once I started working and had to manage money on my own, I had no idea what I was doing.  When I finished school and started earning more from a full time job, things just got worse: I spent every cent I had and more.  When I started work on my Masters degree in 2006 I paid off my max-ed out credit card ($5000) on my new student line of credit, and then continued to spend irresponsibly.

More debt cycles followed and only over the past year or so have I been trying to live below my means.  I am working hard to transition from being a spender to being a saver and to develop more frugal living habits.  I do still want to enjoy my life, however, so I am a little more relaxed with my budget than I think some would be in my position.  I am particularly fortunate that I don’t have to pay any major living expenses at the moment, which is allowing me to pay off debt quickly and save a little bit without worrying too much.

This month I will finish paying off my credit card (which was maxed out at $8,000 earlier this year).  After that, I will be moving on to paying off my latest student loan (currently sitting at $18,200).  It is my hope to be completely debt free by June of 2019, though hopefully I will manage it several months earlier.

I think it’s fairly obvious, then, that if I received $10,000 that I could spend on anything I like, I would use it to pay down my student loan debt.  While the urge to spend and treat myself is strong, getting a 10 month head start my current plan would be incredible.  The sooner my loan is paid off, the sooner I will be able to save at least one full paycheck per month.

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