Yesterday, I ventured into the land of bad decisions. I left my apartment at 8:00 a.m., running late and unprepared for the day ahead. I knew I had a series of events to attend, yet I had not determined how I was getting to them, coordinated meeting points with other attendees or planned how to transition my outfit from day to evening. It was the perfect equation for overspending.
I was aware I approached the day without a plan, but I felt a bit helpless about it. My morning work conference began 9:00 a.m., and I would not be caught dead lugging a weekend bag full of clothes and make-up to an event full of influential health care communications professionals from around the nation. (Leaving it in my car wasn’t an option; I don’t have one.)
So from the conference on, my day was full of tragic spending missteps: I knew I was making bad decisions, yet I didn’t see any better options, so I just kept spending. I bought lunch, I spent $20 on a dress and another $20 on a sweater for the evening (I couldn’t remember if I had anything clean; I would have been fine without them) and then spent another $30 on a cab ride from my apartment (to make up for time), rushing all the way and still arriving a full hour late to my evening affair.
As with most bad decisions, after all was said and done, I felt terribly guilty about my spending afterwards, and in retrospect was able to identify numerous other options that would have enabled me to spend less (arriving to work early and dropping off a bag, or staying home from the evening gathering, for instance). But I was living in the moment, rushing ahead of myself and blindly moving through the day, so I missed those opportunities.
It’s a story not unlike most people’s approach to personal finance.
I’ve been reading Jean Chatzky’s book, “Make Money, Not Excuses: Wake Up, Take Charge and Overcome Your Financial Fears Forever.” Though I’m only through the first few chapters, what struck me while reading her introduction was that many of the women she interviewed were just floating through their financial lives, unaware of where their money was going, without a plan, a savings structure or an understanding of their financial needs and goals. And while most of the women she interviews are in their 40’s and 50’s, the sentiment also rings true for most 20-somethings I know.
For those right out of school, a first paycheck and a first raise are a cause to celebrate. And while happy to focus on securing a job and developing new skills to attain raises, financial planning is not front and center (at least in my experience). So into their mid- to late-20’s, many intelligent, hardworking people are scratching their heads, still moving blindly though their financial lives, spending here and there, monitoring checking accounts and paying off credit card bills and student loans, but feeling terribly guilty about not having any savings and silently panicking because they know where to start. Some have amassed major debt, others have just been hemorrhaging money. In short, living in the land of bad decisions.
The good news is, every single day offers the opportunity to start anew. Every day offers the opportunity to make a good decision – to look into your 401k, to open a savings account, to spend a day at the library learning about financial goals, to reassess your income and your outgoing cash flow. There are numerous resources available – books, Web sites and blogs – that can start you on the right path. But to get there, you have to recognize that the decisions you’re making are the wrong ones. You have to slow down and assess your progress. You have to ask yourself: Am I making decisions today that will help me achieve my future goals? If the answer is no, it’s time to start changing your behaviors.
So today, I’m determined to get back into the wonderful world of good decisions. I’m starting by taking it slow: I went to cheap and delicious buffet breakfast this morning with a good friend, then came home to take stock of all my accounts, finish my laundry and do a bit of writing. We’re going to watch the final four at home tonight and maybe head to a local watering hole to celebrate a big law school achievement for B. It’s all planned out, there’s no rush, and my spending limits for the day are set.
Now for another good decision: time to go transfer some money from my checking to my downpayment savings account. After all, there’s no better way to make an evening of overspending up to yourself than by stashing some cash away for future use.
