“I know that I am intelligent, because I know that I know nothing.” -Socrates
I know what I’m supposed to do. I don’t do it all of the time. Those are the times that I’m dumb. I hate being dumb; and it happens a lot more often than I’d like to admit. I’m dumb when the kids need a bath, but I’m tired so I put them to bed dirty. I’m dumb when I eat an apple for breakfast then buy a donut on the way into work. I’m dumb when my wife asks me if I’ve been drinking and I say that I only had 1. But, most of the time, I’m dumb when it comes to my personal finances.
I know what I’m supposed to do to: ‘manage my money, don’t let it manage me.’ And, I know that I should read iwillteachyoutoberich.com and thepennyhoarder.com every day so I can learn about making more money and spending less money. But I don’t do that every day. I’m dumb.
Personal finance is something that we don’t like to talk about. It makes us feel dumb. We don’t know enough about it and it's kind of a pain to manage. But the truth is, we’re all bad at it. I have been doing some minor personal finance coaching for years – never professionally, but people see the life that I live and assume that I’m not dumb, financially. They’re wrong, I’m dumb a lot of the time, but I’m also lucky to have a pretty good job with a great company and they pay me enough that I can sometimes make dumb decisions and not die from stupidity. So I tell those people what I know I should do, even if I don’t always do it. They also don't do what I tell them because it's what they already knew they should be doing. They're dumb.
There are 4 basic things you need to know so that you can stop being dumb with your finances: 1. How much money do you make? 2. How much money do you have to spend? 3. How much money do you save? 4. How much money do you blow? Once you get a handle on these key details, you’ll be ahead of the game when it comes to being smart about your money.
Here are the stats: 68% of households don’t have a budget (https://www.debt.com/solutions/money-management) 76% of Americans live paycheck to paycheck – (http://money.cnn.com/2013/) 20% of Americans living paycheck to paycheck make over $100K per year. (http://www.economywatch.com/economy-and-business) How dumb are these people? No dumber than me. I’ve been without a budget. I’ve lived paycheck to paycheck. I’ve had an annual household income of +$100K/yr. Look, we all make bad decisions, that’s a given. What makes us dumb is when we refuse to make a decision about our finances. So, to keep you from being dumb – at least initially – make a budget by answering the 4 questions above. Today is the day that you can start being smart about your finances.