I’m not going to talk about the stock market, when or how to invest your money, or which retirement plans are best. There are many companies and individuals out there with more expertise in those areas than I currently have. However, financial stress is a big drain of energy for many people so it is important that we cover at least the basics of getting to the point that energy in and energy out are at least equal in regards to your finances.
My college education was expensive and when I graduated, I opened my own practice which is also expensive. Because I was young and had the illusion that my business would be booming over-night, my debt load was very high and the income of my new business was very low. There was a period of time when paying my bills meant deciding which ones to pay and which ones I needed to call to let someone know they would be late that month. It was a difficult time. I was trying to find inexpensive ways to bring clients in, paying for both an office and a one-room studio, learning how to run a business, all too often hearing that a fellow classmate had quit or failed, and wondering what I had got myself into. The day came when I realized that significant changes had to be made or else I was going to join the ranks of failed new businesses.
If I was going to fail anyway, I’d might as well fail by trying something new because what I had been doing wasn’t working. I moved out of the store-front, easy to get to, furnished with ‘most of what I could want’ office into a small, in the back corner of a large building, no signage, one-room office with only the bare essentials. I concentrated on being the best I could be at my career and giving my customers more than they expected. I stopped all advertising and relied only on word of mouth to spread the news. When someone came in off of a referral, I went out of my way to thank the referrer. And at every opportunity, I volunteered to be a guest lecturer for a lot of specialty groups. I spoke on the topic of their choice and only did a very small plug for my business at the end of the talks. I had no help which meant that I did it all myself. Almost everyone I knew said I would fail as a result of my new direction. Thankfully, they were wrong.
There were a lot of lessons learned in those first few years. I spent 2 years just getting my business to the point that all of my bills were paid on time (that included the move from one office to another). The third year it got a touch easier and instead of bobbing up and down in the pool of business, I was staying above the whole time. The fourth year I traded my little Geo Spectrum in for a used Pontiac GrandAm. The fifth year I moved out of the one room studio and into a small town house. But I learned a lot about running a business, realized later that I had done several things the hard way, learned to differentiate between what people said was needed and what really was needed in order to be successful, and found great satisfaction balancing all of it.
My debt was slowly going down except for my student loans. I was making payments on them, but not enough to even cover the interest that was being added. Knowing what I know now, I never would have gone into debt further before paying them off first. But I did because I counted on money that had not yet been made. That was probably my greatest mistake and is something that I see people doing repeatedly. It was a lesson that I failed at a few times before learning it. Actually it is a three part lesson:
1) If you must borrow money for an education, borrow the least amount possible and don’t even consider borrowing more until it is paid off. (Sometimes the things you think you need are just things that you want.)
2) Earn more than you spend
3) Budget your money…all of your money.
Those three things may seem like common sense, but how many people do you know who actually put all of them into practice? They are, however, the basics of controlling your finances so that your finances are not controlling you.