The value of money: Get on board and save

December 2018 Posted in Columnists & Opinion

carl-sampsonI read an article the other day about a radical new financial movement. It’s called Financially Independent, Retire Early, or FIRE for short. These are millennials who live frugally so they can retire early.

They do it by saving money. What a concept.

My wife and I have done that for decades. We were early subscribers to a newsletter called the Tightwad Gazette, which was published by Amy Dacyzyn. Every month she offered tips, ideas and suggestions for living cheap. One of my favorite tips was to reuse dental floss – and I did it.

But more than anything, it allowed me and my wife to disengage from the rampant consumerism all around us. Instead of buying a new car every few years, we buy used cars and keep them forever. Our record is a 1987 Honda that we drove for 25 years.

My wife also makes her own kombucha – she was making it 10 years ago, before it became “in.” And she’s a scratch cook and baker. She even mills her own flour.

We learned to tell the difference between “wants” and “needs.” If you do that, you can splurge occasionally without having to worry.

I even got into it professionally. When we lived in the Midwest I became a financial adviser, helping people sort through their money problems.

Boy howdy, was that an eye-opener. I felt like I needed to be a psychologist more than a money guy. People are funny about money. Some horde it and have the first dollar they ever made. Others spray it across the landscape. They could never have enough money because they always spend it faster than they earn it.

Others don’t trust banks, the stock market – or anyone or anything. They literally keep their money in a coffee can.

Others used the analyses I did for them to make a pile of money. Still others did the analyses but didn’t follow through. One told me he got an investment “tip” from his brother-in-law about a new business that made kitchen counters from soybean straw.

So much for brother-in-law advice.

The main thing people need is a game plan. Guys like Dave Ramsey and other financial gurus help people do that. With a plan and a little bit of willpower, anyone can pay off their debts and live well.

But the main thing is the whole family has to be on board with the plan. If the wife is doing her part but the husband is wasting money – spending outside the plan – it won’t work. If the husband keeps the finances a secret from the wife, it won’t work. It needs to be a team effort.

I once worked on a plan with a guy who lived by himself. He didn’t have any kids, nieces or nephews, but he had followed a financial plan for decades and built up a lot of money. I mean a lot.

I asked him what he wanted to do with it.

He said he wanted to set up a foundation to provide a free college education to all of the kids in his church.

That, I told him, is a great idea. I lost track of him after we moved, by I assume that across the Midwest kids are attending college with the help of his generosity – and good financial planning.

Carl Sampson is a former stock broker, financial planner and freelance writer and editor.

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