Bottom Line Up Front (BLUF) - The target audience for this series are those who have little to no idea about how to manage money, but those who do have experience and success with managing money may find a few tips useful or a new way to explain it to others. The hope is that this series will be a force multiplier in which people can help other people get out, or all together avoid, crippling debt and improve their lives for themselves, others, and/or future generations.
**NOTE** The following information are my opinions and is for information purposes only. It is not intended to be investment or financial advice. Seek a duly licensed professional for advice.
All of us went through some form of basic education. Some of us continued on with our “formal” education and went to college or university, while others went to trade or vocational technical training. Many others went straight into the workforce after their basic education was completed. The harsh reality is, unless you went to school for finance or business, you likely never were formally taught how you should manage money. Shocking and terrifying when you sit down and reflect back upon it. You learn about mathematics, language, history, science, but the one thing greatly lacking is any discussion about money and how to earn it, how to use it, what taxes are and their implications, and most importantly how to manage money over the course of your life. The tips and tricks that I’m going to go over are things that I have learned in my life, and ones that I have given to others to try to better manage your money.
To give you a quick little “about me.” I’m a mid-30’s husband, father of 2, and I’m the sole source of income for my family while my spouse has the hardest job homeschooling our kids. Growing up I was told like many in my generation that I needed to, “Go to college and get a good job.” So that’s what I did. During the summers I worked as a landscaper making decent money, and during the school year I worked for the University’s Outdoor Education department as a trip staff member. It wasn't much but it was enough to make poor life prioritization choices. I knew I made X amount of dollars per hour, Y amount was taken out in taxes, and Z amount is what I got in my bank account. I really only cared about what ended up in my account, and what I could go buy with it. At the end of the tax year my parents helped me do my taxes, but I really didn’t pay attention to it. When I graduated from college the economy went into the toilet so I did both the best and worst, thing of my life and I enlisted into the US Army as an Infantryman.
It was in the Army that I learned about how little people knew about money and how to manage it. I watched other Joes (generic terms for soldiers, generally lower enlisted) go out and blow their paychecks on women, booze, and stuff. As a Noncommissioned Officer (NCO – Sergeant types aka lower to middle managers) I had the “pleasure” of having to write counseling statements for Joes who were in ridiculous amounts of debt, facing collections, and (later in a different career field) at risk for getting kicked out due to losing their security clearance. I quickly noticed a common thread that none of them knew how to set a budget, stick to it, and manage their money. From a partially altruistic perspective I wanted to help these soldiers get out of debt and give them the life skills that would keep them out of it in the future. I was frustrated that the damage was done by the time I was dealing with them. So I became the "go to" guy for all things financial and managing money. From a completely self-interested perspective I was frankly sick and tired of having to spend my time “counseling” soldiers and writing paperwork after they screwed up, because I loathed having to deal with the paperwork. I got some attaboys and awards/recognition for my efforts, but I didn't do it for those things. I frankly don't care about my dress uniform's ribbon rack and find it to be too "flashy". If you ever met me in person I'm very much a utilitarian type of person. I drive a 16yr old vehicle I paid cash for, buy all my clothes on sale and none of them are name brand, and the only jewelry I wear is this watch (because I was a paratrooper - not a referral link just really like it as a daily wear watch) or a silicon wedding band occasionally. As you can tell I'm about as flash as a cinderblock and 2x4 bench, but I do own nice things and I've done well for myself and my family.
Fast forwards to today, a few years ago I was medically retired from the military and now I find that I’m still teaching the same skills and lessons to my civilian friends/coworkers as I did my soldiers. Everyone I talk with about this says the same thing, “Why wasn’t I taught this in school?” So that’s why I’m here, to try to help educate and inform others and hopefully help them get out of, or stay out of debt, and be smarter with their money.
Right now in 2021 I see a lot of people jumping into the cryptocurrency world and into the stock market hoping to make money. COVID sure didn’t help that out with many people finding themselves unemployed, having hours cut back, or being unable to work, nor did r/wallstreetbets where some people made stupid money on meme stocks while others lost a bunch. While investments are a part of managing money, it’s only after you cover everything else first and have excess money left to play with. In this series we will cover the following topics:
- Establish your goals
- Setting a budget
- Sticking to a budget
- Taxes – what they are, how to plan for them, and how to do them
- Assessing debt and how to get out of it
- Investing money and the risk vs reward matrix
Every now and then throughout these articles my inner Infantry NCO will come out where I will be blunt and to the point. Sometimes, “It just is what it is.” If at any time you have questions ask in the comments and I’ll do my best to address them. I will be creating a template sheet which you can use to help you navigate this process. I've found that even those who are "good" with their money learn a thing or two when they start putting numbers to categories and fully understanding where their money is going. If anyone knows of a good way to "host" an excel worksheet let me know in the comments below and I'll make one to put up for you to download. It will have all of the formulas created and linked so all you have to do is input your raw numbers and you'll get a better idea of your incomes and expenses.
Step 1: Establish your goals
This is sometimes difficult to do for people as you don't know what you don't know till you know it. Clear as mud right? This step applies to more than just managing money as it's a key element in a decision making process/matrix. You can apply this to investing (which we will discuss later on in part 5), to careers and advancements, or to purchases of tangible goods. So for step one you need to ask yourself what is my end goal with managing my money? There is one caveat with this question, and that is that it MUST be specific. A vague answer of "to get rich" isn't going to work here. The best part about this, is that once you reach that point, or even along the way, you can revise your mission statement and adjust your budget accordingly. So, is it to own your own home? Is it to pay for college or your kid's college tuition? Is it to get out of debt? Is it to build up your emergency fund? Is it to retire by 45? Is it to take a vacation? Only you can answer this question so go ahead and think on that for a minute before continuing on....
OK so now you have your "mission statement," that's awesome! Now write it down. For some people appending it to their budget sheet, which we will build in later parts, is all that's needed. For others making signs/posters and putting them around their home as visual reminders works better. You do you, and don't feel embarrassed by them. My number 1 rule in life is that if it's stupid but it works, it's not actually stupid. You're talking to the guy who had laminated 9-Line medevac cards and UXO reports taped onto radios and issued to all of my soldiers as an inspectable item (had to be on them when on patrol), something that was laughed at at first but saved lives downrange. The key point here is knowing what you're working towards, because there's one thing I can absolutely promise you with 100% certainty is that this journey to financial independence will be a rocky road at times and you will take detours. Life happens when you make plans, but having the plan in the first place gives you a path from which you can deviate and come back to if you want to. Having that goal will help keep you focused and give you a really good reason to keep going when all you want to do is quit because it's hard.
Keep in mind that not all detours and deviations are bad, I've had some that took me in a completely different direction and changed all of my life goals all for the better. One of the best things that happened to me was I had a "career ending injury." I ruptured 4 discs in my back and broke 2 vertebra. I don't regret it for a single second. It shattered what I originally held as my goal for a military career and took my down a much more rewarding path to where I am today. Plus I get some cool stories to tell about my journey, and later on when my kids will get the joke I can tell my oldest that I'll never forget them because they'll forever be the "pain in my ass" because of the chronic sciatica I have now. Had I not had that injury at that time I wouldn't have met my spouse and they'd never have been a part of my life. And later on, I decided that falling 15ft to the ground was better than getting shot in the face, which resulted in a neck injury. My youngest will be forever "the pain in my neck" because had I not injured my neck, which ultimately ended my military career, they'd not exist either. Yeah, my life isn't what I hoped or thought it would be, but so what. What am I gonna do cry about it and complain how it's not fair or how life's rigged against me now? Nah, I'm not gonna let that stop me from making it the best life I can live for myself, my family, and those around me who I can help.
The way I see it, when it comes to life you've got two choices, let others run you over and run your life, or take control and run it for yourself. So....you ready to get on board? If so, click the follow button and I'll see you in part 2