There’s probably very few people in the world that checks their credit card balance every single day. I know only of one person. But I am happy to tell you that every expense in her credit card statement is accounted for to the last cent. That results in no unexpected expenses and in turn better money management as evidenced by a high savings rate.
I bet 99% of us doesn’t have the inclination, patience or desire to do what she does. We are more geared to look at the “big picture” and we define “big picture” as something that favors whatever is convenient for us.
If we really pause and think about it, the big picture is always made up of little things. Look at your flat screen TV or your computer monitor. There are millions of dots there a.k.a. pixels. If a few of those pixels are not reflecting light, the screen looks like someone scratched out a few micro dots and it looks blemished. In our familiarity with “high resolution display”, having that blemish could be something that will vex us endlessly.
If you notice, it’s the same with our finances. All the little credit card charges here and there add up to hundreds. All the hundreds add up to thousands. And when the monthly bills come, we suddenly wonder how come our credit card balance is so high? Maybe it’s time to switch to an envelope budget system?
Now let’s go to the other side: investing or saving. Every little dollar bill that we don’t spend today, gets into our savings. Having savings gives us a peace of mind knowing that if we need funds for emergencies, we have savings we can get into. Or in investments: If we buy a few shares of stocks, mutual funds or bonds every now then, before we know it, they have increased in value and it seems that our funds are ever increasing.
To further illustrate this, my grandson James has a bank balance of over $250.00 and that’s mostly from dimes, quarters and nickels that we accumulated when we empty our pockets at the end of the day and also from collecting all the change that are laying around in our car. And this is only a few months worth of effort.
So if we keep on saving instead of spending, the more we’ll have control over our finances. The more we invest, the more we have money working for us, instead of us working for money.
The same is true for any endeavor. Someone said “the journey of a thousand miles begins with a single step”. Actually it will be a total of about 1,760,000 steps for 1,000 miles (thanks to the pedometer app in the iPhone ). But every step of that journey is important in reaching the 1,000 mile point. That is also the reason why it takes several years before we can get formal or vocational education. To be skillful in a professional endeavor, hundreds or even thousands of hours are necessary to be proficient.
Unfortunately, society and technology has made us believe that things can be easily manipulated by only a push of a button or two. Instant gratification is the norm. We want our material things (or even skills) and we want it now. Some of the things we want we can have instantly, but it takes years to pay for the consequence of getting it before we can afford to have it. The thrill of the purchase typically last days, weeks or a few months. But the consequence last a few years. That’s why it’s great if the item you bought can be returned for a refund, because you can still correct that irrational decision. But most big ticket items are non refundable. You can only get rid of it at a great cost to your bank balance.
Gone are the old days when we save up for something, then we purchase it cash. There’s still a few people who does that, but they are probably 5% of the Western population.
When a ship sails from one end of the globe to another port 3,000 miles away, the rudder is constantly corrected to maintain course several hundred times a day. All those corrections are necessary to reach the destination. Without that steering input from the helmsman, the ship will be adrift or get shipwrecked eventually. Our lives should mimic what the helmsman is doing.
This can be done by being vigilant daily with our finances, with our goals and monitoring the process we have selected to achieve that goal. We also have to nurture our relationships daily, by thinking what’s good for the other person, and not the Janet Jackson approach of “what have you done for me lately?”. These are all necessary to have fulfilling lives. Having this kind of life puts us in a better position to empower others to have fulfilling lives also.