J. Money, one of my favorite financial bloggers and podcasters, bought a home on a whim that he wasn't ready for. Fortunately it led to a greater awareness of what was most important - like family, savings and Craigslist (he's made tons of money selling things on there that I would've considered junk!) Check out his website and podcast M.O.N.E.Y on iTunes for more details.
Here are a few of his tips and suggestions for avoiding your own financial disaster.
MM: Which part of money management do you control the best? What remains your biggest struggle? How do you handle that? Example: you save and invest well but have never been good with managing your day to day expenses. Or your bills are never late but you don't save as much as you should.
J. Money: I'm really good at saving and taking action on things "today," but I can never plan for the future as best I try. I just can't comprehend what life will look like a handful of years from now, or even weeks from now, so I'm horrible at anything relating to the long term much to the chagrin of my wife and friends. So to combat this I just do my best to stash away as much money as I can in general, and then make sure to track my net worth each month so I can watch how it's growing, or not, over the years to better put things in perspective. I still have no idea how much I'll have or where I'll be or what I'll be doing in this far off future, but I do know that my money should be fine as I work on the other areas in my life that will probably be needing more attention. Life just keeps speeding up. It's crazy!
MM: What's your favorite tip on money?
J. Money: The best thing I've ever done with my money is to track it. We all think we know where our dollars are going, but until you actually sit down and put it all on paper you're just guessing. Take 5 minutes each month to log into all of your accounts and copy/paste the balances down into a single spreadsheet. Put your assets on one side (savings, investments, property) and your liabilities on the other (debts, loans, etc) and then deduct them from each other and that number that remains is your "net worth." It might be scary at first to see it, but knowing that one single number will change how you view your finances from that point forward. And if you diligently track it each month, you'll see first hand how your daily actions affect it for the better or the worse. And over time it'll get better, believe me. Just the mere fact of "knowing" where you stand will encourage you to make smarter moves over time. Whether you're paying off debt or investing for retirement, it all gets accounted for!
MM: Tell us about your blog.
J. Money: My blog is all about having fun and talking about money as if we were down the street sharing a beer together. I'm not an "expert" or certified such-and-such like you'll see in the financial world, I'm just a regular guy who loves discussing money and helping people reach financial freedom. And I facilitate this by sharing my own personal journey every week,the good's and the bad's, with real numbers and all, to show real life examples and get people more comfortable being open with money. Not everyone will love my blog, but hopefully it gets you to stop and pay attention more.
(And for those who pass, you can check out my other site, RockstarFinance.com, where I curate the best articles on money online and introduce people to handfuls of other great personal finance blogs on the scene. We have an amazing community online!)
MM: What's the one thing you'd like everyone to know about money?
J. Money: That it's simple, but you just have to CARE enough to make things happen. Everyone already knows how to save money or get out of debt, but without understanding that deep down "why" inside of you you won't be motivated enough to put it into high gear. Just like with losing weight or stopping smoking, you have to figure out what gets you to stop and finally take action. It's different for everyone, but it is possible!
And so it is.