Personal Finance Advice for Idiots like Me

If you listen to Suze Orman or Dave Ramsey you have probably had a moment when you kicked yourself in the pants for the financial shape that your life is in. Frustrating and depressing, looking at the amount of money you need and the amount of money you make can send just about anyone over the edge into the state of financial coma. With bill collectors calling every day all day and you living in fear of your car being repossessed or your home being foreclosed on, the time has finally come for a simple method for anyone to remove themselves from the grips of financial ruin.

While Suze Orman and Dave Ramsey are absolutely geniuses at what they do. I hate admitting to myself that I am Young, Fabulous & Broke. That is hard for anyone that has even a morsel of pride as I admittedly do. It is equally challenging for me that I am in need of Financial Peace. As if my life's chaos is driven solely by my inability to balance my checkbook or pay even the minimum balances on my nine credit cards. You know my story.

At the age of eighteen I was free of debt, without a credit card to my name. I got my first one as a college freshman and used it to pay for some electronics for my dorm room. Then I got my second one to pay for my spring break vacation. Then I got my third one because I needed a cushion to pay bill balances on my first two. Then I missed a payment and it was downhill from there. The road to financial ruin is filled with missteps that begin with one untimely crisis that opens the door for the spiral to begin. As opposed to telling you some pie in the sky dream about everything coming together, a more realistic approach to money matters is necessary.

If you want to get out of debt the first thing you have to do is give up trying to save money. I know Suze and Dave are not going to agree with me a lot in this article. But that is okay, I don't work for them. I work for me and that is what matters most. My life has to become the one investment I ensure I always take care of. If you get sick, nothing else matters. If you lose your job, your financial plans go out of the window. If you become expendable on your job, you cannot plead the case that you are on the eighteen month plan to financial health. So begin fresh by focusing on the one thing that matters most, YOU.

That sounds selfish until you understand that the more you invest in you the more you will get out of you. By investing in you I do not mean going out and buying a new wardrobe (although you may need to). I do not mean anything like that. By investing in yourself I intently mean by putting resources in you that will one day prove to be a tool in where you are trying to go. That means continually attending seminars held in your community or at the local college in order to maintain a spirit of learning. Make the library your second home by renting two books a month. Focus on leadership and change. Continue to grow otherwise you will find yourself dying a slow horrible death of irrelevance because you cannot compete with today's graduate with yesterday's degree. Trust me.

What does that have to do with you paying your bills off? You are worth more to your company the more you know and have invested in yourself. So by continually repositioning yourself as a person competent in a multitude of disciplines your value and equally your salary will follow suit. More money means a greater ability to pay the bills that are choking the life out of you.

After focusing on you the next thing you need to do is not fund a retirement account or some investment vehicle. If you are like me, you have forty years until you retire, so take the next five to get your house in order so that you can make a serious attempt at funding your retirement. The second step in the financial renovation plan is scaling your life down. I know that sounds strange but follow me. You have a best friend who is single and paying the same amount in rent as you do. The smart thing for the both of you to do is find an apartment or home that has enough space for you to share it. This will cut probably 30-45% of your housing expenses down. That would include rent, utilities, and cable. By scaling your life down you make room to accomplish other things. A big step for some people is scaling down the vehicle they drive. You may not want to but getting ride of that $25,000 car for a $15,000 is a major deal. But watch the logic. If you pay $450 per month today and can pay $275 per month tomorrow, does that not make sense? By scaling your life down you will be amazed at the potential of subtracting 50% of your monthly expenses.

The next piece in the financial renovation plan is living without it going debt. One of the hallmarks of people in debt is the term budget and the follow-up, 'not in the budget'. I heard it as a child and hated saying it as an adult. But what happens is as you look to develop disciplines and parameters for spending money your life takes a hit as well. You cannot go shopping with your girlfriends like you used to. You cannot hang out at Hooters like you used to on Monday nights with the guys. So what do you do? You reinvent that time. Maybe instead of going to Hooters you BYOB at your house on Monday nights over pizza and fried chicken. As opposed to spending $30 every Monday, now you are only out of $10. Or for ladies you certainly cannot shop like you used to and I would never ask you to spend your Saturday's going window shopping so the simple way to reinvent the time is finding a hobby you and your girlfriends can do together. An example of this is pottery or some other artistic outlet.

The last piece of the financial renovation plan is something I am sure Suze Orman and Dave Ramsey would probably cringe at. If something gets written off, forget about it. That sounds harsh doesn't it? It may even sound negligent but here is the point. Your FICO score will not change on a particular issue once it gets written off. The dent has already been made. It is smarter to let it go.

I know what you are thinking, my ideas are crazy. But when you look in your closet the number of shoes you have is insane just the same. The number of beer bottles in your garbage can is ridiculous as well. It takes a crazy to know a crazy.

Personal finance is not a science.