My brother in law and I had a good conversation about money today while we were all visiting at my mom’s house. For those few readers that have been reading ELYM for awhile, you’ll remember that my mom and dad had a massive fire at their house back in December and then my father passed away two weeks later (from a heart attack). Anyway, my mom has been staying at my sister’s for the last 7 months while she waited for her house to be repaired. I’m happy to say that she is finally back in and the place looks amazing. I negotiated some upgrades with my friend/contractor and we were able to do some additional work on the house on top of what the insurance company was paying for. Basically my mom got all new paint and carpet inside, all new appliances and all new roofing and paint on the outside. (and lots of smaller things done in the house as well). On top of that, we decided to also install all new windows, gut all three bathrooms and put all new doors and trim throughout the house. The place looks great and I think my mom, while she has had to face moving back without my dad, is much happier to finally be home. Today was the first “get together” we’ve had in her house and it really felt nice to be back in there with my mom.
Anyway, that was a pretty long set up for the original intent of this post. As we were sitting there my brother in law and I started talking about finances. The majority of the conversation was around finding that sweet spot. You know the one. That balance between saving enough and spending a little so that you are both living for today and saving for tomorrow. It’s easy to see that most people struggle to find that perfect balance between being sure that you are enjoying each day (because you never know when your number is up) and also not screwing your future self. We both agreed that it’s really all about moderation. Just like I’m not a huge fan of people on either the far right or the far left in politics, I’m also not a fan of either spending to excess or depriving yourself of living comfortably by saving every cent you earn while eating cardboard. (I wonder if anyone has ever done that…… Is there any nutrional value in cardboard?)
For both my brother in law and I the sweet spot really comes down to living debt free (other than a mortgage and we both agreed that we’d like to pay off our houses far in advance of the mortgage terms we have). Neither of us want to have any car debt (we don’t have any and they are almost done paying off their only car loan) and we also don’t carry any consumer debt. On top of keeping non-mortgage debt to an absolute minimum (read zilch), we also both want to be investing at least 10% of our income each year. In reality we are saving about 15-20% of our income. That leaves us both able to enjoy things today while also ensuring we are not setting ourselves up for financial ruin later in life. Like I said earlier, we both agreed that it’s all about moderation and living below your means.
I just love having conversations like this with people. Call me sick, but I think if I had a choice, I’d spend all my time talking to various people about their financial situations. I suppose that’s probably why I love reading PF blogs. As I type this, I’m wondering if I’d enjoy being a financial planner. I looked in to that once and realized how much I don’t know. It’s too bad that there isn’t a career that helps people with the very basics of personal finance. If there was, I bet I wouldn’t be half bad at it.
You an I seem very much alike by this post. I also enjoy talking to people about finance, and helping people see the ‘broader picture’ yet when I got a comment from a financial planner that answered one of my questions that ‘you seem to enjoy this, why not look in to taking it up’ I went on a search.
I figured I could finda good online course to take in my spare time, learn to be a CFP and be rolling in people looking to get their fincances going.
Turns out it’s a huge undertaking. Like you it made me realize how little I really know.
I suggest we invent a whole new way of approaching the situation and call ourselves ‘Financial Assistants’. We assist people by going over their finances with an objective view and make recommendations. More of a friendly conversation and go over of the finances.
I would be willing to bet far more people would be in tune with something like this than financial planning. I’ve been reading about investing and finance for over a year and didn’t even realize what a financial planner actually does until I looked in to getting CFP cert. I wonder how people who don’t look in to it would ever know.
Financial Assistant – I like it. You could really cover the basics with people and show them how they can turn the corner and start living on less than they earn. Give them strategies for that etc. As long as you don’t give them specific investment advice, I bet you would keep yourself out of trouble.
The thing I find frustrating is who knows where that “sweet spot” is? I definitely live under my means have no debt (besides student loans) and save at minimum 10% (usually closer to 20%) of my take home pay. I could save even more since I pretty much limit how much money I spend every week and I would much rather save a dollar than spend it.
I guess it is very difficult to know what to do with money and no matter what you do, it always seems like there is another, better option… who knows… haha