To break up the hours sitting in an office chair and looking at a computer screen, I generally try to walk for a half hour during my lunch break on a local public rail trail. The path is shady, the view is stunning, and lack of distractions is spectacular!
During my walk the other day, I stopped to talk to a middle-aged man who was drilling some wooden planks into a broken part of the railroad that connects the woods over a small lake. I’d observed that these planks had been decaying one-by-one for months, and the damage was getting to the point where the missing boards were posing a legitimate danger to inattentive walkers. The man had apparently noticed the same thing and was spending a portion of his afternoon repairing the broken sections with his own tools and expertise.
I was genuinely touched by his compassion and asked him what inspired him to take on this work. Most people would have done nothing or just called the city to complain (same result).
“Well,” he replied, “to tell you the truth, I won 100 bucks today on a scratchie. Since I knew I was probably just going to blow the money on more scratchies, I decided to take the cash down to Lowes, buy some planks, and fix this darn path. I ain’t exactly the ‘savings type’ so thought I should spend the money on something useful.”
This quick interaction with “Mr. Scratchie” got me thinking (again) about how little we teach people about saving money. We teach children how to write in cursive, dissect owl pellets, make paper snowflakes, play Hot Cross Buns on the recorder, and even forge a river on the Oregon Trail without dying of dysentery, yet we spend no time teaching them how to manage even a modest amount of money. Indeed, there is no greater failure of our school systems than the lack of financial literacy.
Nonetheless, every adult is faced with countless financial decisions every day. For example:
“What percentage of my income should I prioritize to paying off my debt, vs. investing in stocks/bonds/businesses, vs. additions to my 401k/IRA to save for retirement?”
Whoa, slow down, Centsei! Way too deep for your 5th post! We’ll tackle this in the next post. Let’s break this down.
What percentage of my income should I devote to paying off my debt vs saving for retirement?
This, too, is an important concept, but let simplify further.
What should I devote to saving for retirement?
Now we’re getting closer…
What is saving?
Much better! Let’s first distinguish between (genuine) saving and (fake) “SAVING” since advertisers even use this term in a deceptive manner to separate you from your money.
“Saving” will refer to money that you put away for future use. In other words, the time-shifting of your financial lifeblood. Saving is essential to building your long-term wealth, and it is important to save as early and often as you can, regardless of your age and salary. You can look at saving as the difference between you income and your expenditures. The greater percentage of your income you save and the better you prioritize these savings, the more financially successful you will be.
“SAVING” will refer to the deceiving term used by advertisers to deceive you into spending more money, not saving it. You know the lines
• SAVE 25% off MSRP with this coupon! • Special SAVINGS when you shop today! • Buy one get one free! That’s $35 in SAVINGS! • Choose between 0.9% financing or SAVE $2,500 when you purchase directly from our dealership this weekend!
Ironically, ads even have terms that involve spending money: “Retail Price…” “Shop today…” “Buy one…” “Purchase directly…” Yet, we fall into the trap and convince ourselves that we are saving, not spending. This is no coincidence.
You cannot save money if you spend money. A discount at checkout is not at all the same as an investment in your future. The latter gives you choices, the former takes them away. The concept seems so simple but is lost on so many. Knowingly or not, we turn a blind eye to our self interest as we salivate about “spending less,” “getting a deal” and “coming out ahead” for a particular purchase.
Spending less than what? Getting a deal from where? Coming out ahead of whom?
Advertisements are designed to turn up our short-term impulses and turn off our long-term judgment completely.
The point is hardly profound: You cannot save money if you spend money. Saving is not the same thing as SAVINGS, as tirelessly as advertisers work to convince you otherwise. Every unnecessary dollar that you spend today is one step farther from financial freedom and one choice fewer that you’ll be able to make tomorrow. $1 saved today is $10 more that you could have in retirement, assuming 35 years and a 7% return. There is no better “deal” than that.
This isn’t to say that you shouldn’t fix a broken path every once in a while, but no person should be resigned to the label of not being “the savings type” just because they never learned how. And certainly no person should be tricked into spending money under the guise of getting a discount.
You can, you should, and you will learn how… but only if you subscribe, leave a comment below, or SAVE this blog to your favorites!
Oh, and if you’re curious how Mr. Scratchie’s work turned out, I took a picture of it today.
If you want to get financial bloggers or gurus worked up, there is no quicker way than by baiting them into an argument about whether it’s better to use cash or card to make your purchases.
Summarizing the two opposing perspectives:
Card Advocates (ThePointsGuy): Use your credit card! You’ll accumulate valuable cash back and avoid the temptation to spend the cash in your wallet, all while protecting your purchases!
Cash Advocates (Dave Ramsey): Pay for everything in cash! You won’t accumulate interest, and you’ll avoid going into debt!
With loads of information and conflicting opinions – what’s the answer? Are you better off paying in cash? Credit Card? Debit card? Which one of our gurus is right?
Neither of them.
And… both of them.
A Brief History Of Cash
To solve this puzzle, we’ll start off by looking at the history of cash, and the shorter (though more complicated) history of cards.
Cash dates all the way back to about 600 BC. King Alyattes (I’ll call him “Aly”) of Lydia is often credited with minting the first currency to serve as a medium of exchange for goods and services. Aly made the coins from electrum and imprinted them with a recognizable insignia so his people would accept their value. Coins were supplemented by the lighter paper currency in the 1600’s, and the rest, as they say, is history.
It’s likely that Aly was more concerned with oppressing his people and retaining family power than he was appreciating the utter brilliance of this creation, but the concept is arguably one of the most important inventions in history – a physical representation of stored value that was widely accepted to conduct business. No longer was it necessary to barter goods or services in real time. Rather, the fruits of your labor could be could be compensated with currency, and at a later time, you could exchange that currency for the fruits of someone else’s labor (or as it’s known today, “saving”).
The psychological effect was profound as well. People could mentally connect the value of their work with something tangible, and over the course of the next millennia or two, “cash” became something fundamentally understood as food or water.
Currency allowed people to time-shift their purchases, and history was forever changed. Money was a promise to both the buyer and the seller that each had produced something of value in the past or would produce something of value in the future. From this, society developed more complex forms of money like loans, financing, and investments.
“Currency allowed people to time-shift their purchases, and history was forever changed.”
Before cash: Grow carrot yesterday -> Trade carrot for bread today -> Pray you have more carrots for more bread tomorrow
After cash: Grow carrot yesterday -> Sell carrot for cash today -> Spend cash on bread tomorrow, the next day, or in the future
The Evolution of Credit Cards
Cards, particularly credit cards, have a shorter history but grew from this same idea. The early concept of paying for goods and services with a card dates back to the early 20th century. What started as a “Charge-a-plate” with a paper slip to record purchases in the 1920s, transformed into a single merchant “charge card” for credit at a single store in the 30s and 40s, and evolved into the revolving credit card by the late 50s.
It didn’t take long for retailers to realize that customers were willing to spend more in their store if they were given access to more money than they had with them at that given time. Such was the birth of store-branded “charge cards” that you could use to buy more in a given store and pay later. From there, it certainly didn’t take long for banks to recognize that they could make the card concept available all nearly all stores via a short-term loan… and charge customers for the “privilege” and convenience of this loan. Such was the birth of the modern-day credit card system.
But the grab for money out of this ecosystem did not stop there. The banks also realized that the card payment systems could offer even more “privileges” to the merchants than it did to the cardholders. Merchants no longer needed to worry about depositing cash, employee/consumer theft, and human error in the checkout process. Furthermore, they could reduce employee costs, sell to consumers via phone or internet, and command a higher average transaction price from consumers paying with card than with cash. The banks began to charge merchants a fee to accept cards, which allowed banks to make money on both sides of the transaction.
Ever wonder why a gas station sometimes charges you more for card than cash? That is the gas station’s attempt to recover the costs of accepting cards in an industry where margins are razor thin.
To sweeten the deal, the credit card issuing banks began to offer “rewards” to consumers who used their brand of credit card. “1% back on all purchases!” “5% back on restaurants this quarter!” “$200 sign-on bonus!” “Earn points and redeem for flights!” The behavioral psychologists who designed these rewards cards had struck gold (for the banks). Consumers salivated at the prospects of “getting paid for spending money” and, as expected, their spending behavior on the cards went through the roof. Websites solely dedicated to the idea of trying to maximize these rewards were created, and the rewards card became a symbol of financial sophistication.
The irony was that at the same time, the percentage of total consumer spending paid by card has grown nearly every year since cards were introduced. So, too, has consumer credit card debt. The merchants and the banks emerged victorious.
Debit cards were introduced as a more convenient alternative to checks, and the card-based system evolved further. The ubiquity of the card payment system was inevitable. Eventually, the card issuers came together under united “payment brands” like Visa and MasterCard, who began taking a small percentage of each sale on top of the banks’ fees. American Express began marketing itself as a credit card system for the elite. The cost of the card systems grew further.
Oh, and don’t be deceived. These high costs of card payments are passed-on to you, the consumer, in the form of higher prices at checkout.
Ever wonder why some gas stations don’t charge you more for credit? Sorry, they’re not doing you any favors. Rather, the stations have just “pumped” the cost of accepting cards into their price for everyone!
Today, we see an even stronger push for faster and more convenient electronic payments. Nearly all smartphones allow consumers to just waive their device to authorize a purchase. Merchants will encourage one-click checkout, auto-pay, auto-shipments, subscriptions, biometric payments, and micro payments, all under the guise of making spending easier. The reality, of course, is that these marketing strategies drive up consumer spending and induce habit-forming behaviors.
Credit Cards: The Double-Edged Sword of Consumer Finance
The point of this (and yes, I promise there is a point) is that over time, developments in money have made it much easier and more expensive to spend our money. Credit cards can be a great tool for finding online deals, minimizing the cash you carry around, and earning a few points, but it comes at the price (literally) of increased spending habits and higher prices a checkout at best… and compounding interest payments and perpetual debt at worst.
You are not immune to these effects. Even if you’re financially responsible and pay off your card in full and on time every month, you’ve still spent more money than you would have if the card didn’t exist and you were forced into paying cash.
Don’t believe me? There have been numerous studies and articles , like thisthisthis and this, proving this effect. Most find that, on average, customers spend 15% more if they have the ability to use credit card compared to cash.
“Customers spend 15% more if they have the ability to use credit card compared to cash”
This is a staggering amount of money! The effect was observed across income levels and geographic locations. For smaller transaction sizes, people spend nearly 100% more when paying with card over cash for the same purchases. McDonald’s acknowledged that customer paying cash spend a little over $4, and those paying with card spend $7. While there could be some other factors like income, there is no question that cards have a profound effect on customer spending habits.
People are not forthcoming about the magnitude of credit card debt, either. One study found that 75% of people claim that they pay off their credit cards every month, but credit bureau statistics show that almost 50% of people carry a balance on at least one card every month. This also means that 25% of people are not being honest with themselves about their financials (a figure that seems a bit low to me, but I digress)!
Credit card debt can be crippling to your finances. Of those with debt, the average balance is $5,000, and 70% of those with a credit card balance believe they won’t be able to pay it off this year. As a rule of thumb, if you carry this $5,000 “average” balance at 20%+ interest and make only the minimum payment, and the interest paid on the purchase will more than exceed the cost of the purchase itself. Your $5 latte cost you over $10 by the time it’s all paid off. That is the dangerous power of compounding credit card interest!
As a rule of thumb, if you carry this $5,000 “average” balance at 20%+ interest and make only the minimum payment, and the interest paid on the purchase will more than exceed the cost of the purchase itself.
The studies don’t give specifics about debit cards, but the consumer has access his entire bank account balance at his fingertips. One can only assume that debit cards likely increase consumer spending habits at least marginally. There are no lines of credit or interest payments, but some banks make it all too easy to overdraft and incur fees that way.
In fairness, there are some genuine benefits to using credit cards over cash.
Most people will cite the rewards as the primary reason they use their card (though, astoundingly, 30% of people with rewards have never redeemed their rewards). Rewards can be excellent, particularly for purchases where you are certain that you would not be paying more in cash. Our family uses cards for these purchases regularly: my internet service that has a fixed price for the term, my car insurance that is locked in for a year, and my wife’s (Lady Centsei’s) grad school classes (which is an added bonus, since her employer reimburses by check each semester). If truly fixed expenses like these can be paid by card at no additional cost, the rewards are a benefit.
Additionally, cards give you the ability to charge back (dispute) unauthorized purchases, including those where the merchant fails to fulfill the purchase.
• Thief stole your card? Charge back. • Online merchant fail to ship and won’t refund? Charge back. • A call to cancel a service isn’t honored ? Charge back. • Annual gym membership paid in full, but the gym goes out of business? Charge back. • Store goes out of business before you can return your purchase? Charge back.
You have the right to these disputes here in the U.S. and in most countries, and often your liability is limited to no more than $50. It’s very important to know your rights.
Other benefits of cards can include bank-specific perks like travel insurance, ID theft protection, and credit score monitoring.
None of these perks are worth it, however, if you end up paying interest and fees. A single late or missed payment can wipe our years of rewards and bonuses.
Cash or Card: How To Decide
There are pros and cons to both, but I hope this article can point you in the right direction.
To assist the decision making process, Penny Why’s would like to present her first flowchart of the blog to help you choose between the two:
That’s it. If you have ever been late on a payment, had to pay interest, or are going to spend more because you have the card, pay cash. You’ll spend 15% less and save a fortune on fees and interest. Yes, this means most purchases should be made in cash.
Conclusion
Why should you trust me? Well, if you’ve made it this far into the article, that’s a good sign. In the Centsei’s mustache we trust!
Seriously though, I’ve devoted my entire career to working in payments industry. I know the credit card system inside and out, and I’ve seen firsthand the power of cards across nearly every sector of the economy.
One time at a payments seminar, I heard it said that carrying a credit card is a bit like having a loaded gun in your house. Yes, if you use it 100% correctly and nothing goes wrong, it can provide great benefit to you and can be an excellent tool. However, the reality is that you are 20x more likely to harm yourself or your loved ones than you are to use the tool as intended. It’s OK to admit that this is the case, and it’s best to not bring the tool into your home at all. This blog is non-political, but I use this just as an example to demonstrate that, statistically, the majority of people come out on the losing end of the credit card game. You likely will too.
If you’re on a budget and looking for just one trick to lower your expenses, cut up the credit cards and pay for everything in cash. If you absolutely must make a purchase by card, pay of the balance immediately, not at the end of the month. It’s a hard habit to break, but I guarantee the impact of switching to cash on your finances will be monumental. That physical feeling of parting with your money will make you a better budgeter in all aspects of your life.
This is an area of my own life that I could improve. Until I got serious about my finances, I too would put everything on the card and get a sweet dopamine rush when I cashed in those rewards in $100 increments. I always paid my cards on time and never accrued interest, but I’m 100% sure that my additional spending due to using cards was far more than I earned in rewards… by a long shot. I did not “beat the system;” the system beat me. Even now, I try to use my own flowchart and ask myself if I’d make a particular purchase (or spend as much) if I didn’t have the card. Usually, the answer is “no.””I did not ‘beat the system;’ the system beat me.”
“I did not ‘beat the system;’ the system beat me.”
At some point during our journey in this blog, I may do a full month or even a year going cash only. I’ll document the experience and share my thoughts. If I can convince Lady Centsei to do the same, the experiment would be all the better!
As a wise man once said:
Dave Ramsey (Hey, I didn’t say he was entirely wrong, did I?!) Image from Pinterest
Break free from the misinformation surrounding both cash and cards. Understand that financial products canwill be used against you by clever marketers to separate you from your money. Accept that you are not immune to their psychological tricks. Retain your ability to make choices in the future by spending less today.
The Centsei provides commentary free of shock-value and click-bait, so today’s first topic shocks approximately no one: being poor really, really sucks.
I don’t need to cite the studies to show that poverty is correlated with a variety of negative effects:
• Shortened average lifespans • Crime rates • Withdrawal from society • Substance abuse • Hunger • Sickness • Discrimination • Unhappiness (OK, I lied. One study cited)
Poverty is the ultimate expression of powerlessness.
In contrast, wealth is correlated with the opposite effects:
• Longer lifespans • Participation in society • Good health • Education • Confidence • Happiness, of course
However, correlation (as all good Centsees like you already know) does not imply causation.
We see plenty of examples of people with great wealth that end up being the unhappiest of all: the bankrupt lottery winner, the burned-out child star, the actor-turned-addict, the head-shaven pop singer, the adulterous golf pro… not to mention the many criminals who experience great wealth or fame (and even their own Netflix TV shows!).
At the same time, we see countless examples of everyday people with much less wealth and considerable happiness: the family down the road involved in their children’s lives every day, the couple next door with more friends than open evenings for board game night, the single mother who volunteers what little time she has to better her community, the random internet blogger who characterized himself as a martial arts instructor with a comically long mustache and a flying pig sidekick. Yeah, “normal” people like that!
Why does this happen? What is the connection? Do you even need money at all to be happy?
Well, yes you do, but not as much as you might think.
We’ve seen already that money buys you choices. Having some choices (money) when you’d previously had none will definitely make you happier. If you have some flexibility on where you live, what you consume, how you spend your free time, and how much free time you actually own, you will be happier. We should all strive to have our core “needs” met, along with some of our “wants.”
“Some” is the driving term here, as having more financial resources and choices eventually plateaus and often causes one’s well-being to even decline.
Not everyone handles the ability to have an abundance of choices very well… at all. The lottery winner has “friends” and family appear from out of the woodwork begging for money, and because he never learned to manage his wealth, he ends up destitute in a few years. The child movie star never gets to be a kid, instead living in an artificial bubble created by adults where she gets introduced to adult things (e.g. drugs) and loses her cinematic appeal at the blink of an eye. The corporate executive makes six figures, but doing so comes at the expense of 80-hour weeks and driving home in his Lexus to find his children already asleep.
Higher incomes also tend to come with more responsibility. You might pick up a new expensive habit. You might find yourself asked to help out a family member who’s down on his luck. You might see your friends leaning on you to pick up the tab (in which case, find better friends). You might feel pressured to donate to causes you don’t really support. You might have acquaintances ask you to invest in their shady business ideas. You might think it a bright idea to start your own business (more on that one later).
While it would be nice to be able to choose to do these things, these choices can turn into obligations. The same money that once represented your financial freedom now becomes an anchor tying you down to a lifestyle you didn’t need or want.
A well-cited study by Nobel Prize winner Angus Deaton showed that happiness does tend to increase as annual income goes up, but only up to about $75,000 per year, at which point it flat lines or even decreases by some metrics.
Source (OK, OK… last citation for real this time!)
Here are what the lines represent:
(Left-hand side) • ‘Positive affect’ is the average of the fractions of the population reporting happiness, smiling, and enjoyment. • ‘Not blue’ is 1 minus the average of the fractions of the population reporting worry and sadness. • ‘Stress free’ is the fraction of the population who did not report stress for the previous day. These three hedonic measures are marked on the left-hand scale.
(Right-hand side) • The ‘Ladder’ is the average reported number on a scale of 0-10.
Hold on a second!
You didn’t come here for academic mumbo jumbo, and I certainly didn’t come here to write about it. Let’s see if our friend Penny can summarize… in English.
That’s better!
Noteworthy is the fact that the study only considers the income of the individuals in question, not their spending, assets, debt, or other outside monetary factors that could affect their overall wealth. There is no question in my mind that the person making $60,000 and spending just $50,000 (and saving for retirement) will experience more long-term happiness than the person making $80,000 but spending $100,000 (and filling that $20,000 gap with debt!).
The study sheds some light on a common misunderstanding: there is an upper limit on how much our paycheck affects our overall well-being. More importantly, it is an obtainable upper limit for a large number of people in a large number of industries.
Still, a higher income will only take you so far. If you’re fortunate enough to make substantial increases in your income during your lifetime, don’t be surprised if you find that last pay bump a lot less satisfying that the first one. If you’re already making $75,000 and are thinking about taking a job that pays more but would negatively affect your work/life balance, don’t.
Having no choices sucks. Having some choices is a very good thing. Having a too many choices (at the expense of our leisure time, stress level, or free will) can be a bad thing. The journey to find that perfect balance is one we will continue to explore together.
As my birthday approaches this year, I’m reminded of a day from 25 years ago when a large envelope appeared in the mail with a note on the outside in Grandma Centsei’s familiar handwriting. The envelope felt heavy and thick, and my anticipation of a card that might contain a bit more than just the customary birthday joke was very palpable.
The big day finally arrived, the envelope torn open, and the source of this “mystery bulk” revealed: two fresh, crisp twenty dollar bills. In disbelief, I examined the bills closely, taking in their texture, weight, smell, taste (just a small lick, I swear)… their very aura. With such a thorough examination, I soon realized that these bills were truly a magical: they even had d sequential serial numbers.
I couldn’t believe my luck! What were the chances that two bills like this would end up in my hands on my birthday (actually, not as unlikely as you would think, but try telling that to an eight year-old)? Would someone pay a million dollars to me someday for this rarity? Could I frame them for all my friends and family to admire? The possibilities were endless.
In the coming days, reality set in. More specifically, a new video game went on sale at Toys R Us, and the excitement of defeating the final boss now far outweighed the pride of framing duplicate Andrew Jackson portraits in my bedroom. A seemingly insurmountable impasse had arisen: if I spent my money on this game, then my chances of being able to afford the more expensive new bike I wanted would basically be put on hold until my next birthday, basically an eternity. What’s more, I wouldn’t be able to buy something even bigger and better down the road. If I saved even more money, maybe someday I’d be able to pay my little brother to do my chores for me! Now, the possibilities were truly limitless. My visions of the possible opportunities were growing like wildfire.
I remember going to my parents with my dilemma (conveniently omitting the little-brother-servitude bit), thinking they must have run into a conundrum like this before and could shower me with waves of deep financial insight.
Instead, their answer, which was less than half the length of a presidential tweet, really struck me:
“Well, it’s your money, so it’s your choice”
Deep indeed.
Money buys you choices. Not material goods. Not status. Not convenience. Not power. Not respect. Not fulfillment. Not success. Not peace of mind. Not even happiness. Choices.
There’s no question that money can be a means to many these things, but it is not an end itself.
The study of personal finance is one in the same as the study how we make choices. Money is nothing more than a measure of your ability to make decisions for yourself, both now and in the future. That’s why it’s so important to learn how to manage your money well.
The implication of money’s connection to choice is obvious throughout society. High levels of wealth mean having countless product and lifestyle options. Low levels of wealth mean few, if any, choices.
Wealth is a spectrum, but for the sake of simplicity, consider the following scenarios that might arise in everyday life, as viewed from the perspective of a high wealth vs a low wealth individual:
High Wealth $$$
Low Wealth $
Location
Many factors for decision:
Distance to work
Quality of the school systems
Neighborhood safety
Traffic
Proximity to family/friends
Culture
One factor:
Cost of rent
Housing
Many factors:
Rent or Buy
Square footage
Floor plan
Storage
Amenities
One factor:
Whether the landlord will accept me
Children’s Education
Many factors:
Reputation
Public/Private/Charter
Boarding
Location
Religious focus
Extracurricular activities
College Preparedness
Staff Quality
Culture
One factor:
Dictated by city/town school system
Food
Many factors:
Nutritional goals
Dietary needs
Taste preferences
Brand
Convenience
Ethical standards
One factor:
Giving family enough to eat this week
Healthcare
Many factors:
Doctors preference
Hospital preference
Prescription needs
Preventative care options
Mental health care availability
*All paid for by insurance
One factor:
Whether I can afford this or have to put it off (again)
Cars
Many factors:
Car, SUV, or truck,
Size
Brand
Milage/hybrid/electric
Environmental/ethical standards
Durability
Amenities
Financing availability
One choice:
Public transit schedule
Financing/Loans
Many factors:
Lowest interest rate
Financing length/terms
Customer service
Ethical standards of lender
One choice:
Whether they will even lend me money
Household Maintenance Outsourcing
Many factors:
Cleaning
Landscaping
Appliance repairs
Remodeling
Painting
Childcare
Amenities
One choice:
Keeping the household afloat without hired help
Free Time
Many factors:
Time with my children
Time with friends and extended family
Club/groups
Hobbies
Volunteering
Vacationing
Education
Developing new skills
Working out
Maintaining health
Resting/leisure
One choice
Number of second/third jobs that can be fit in
Financial Planning
Many factors:
401K’s,
IRA’s,
Pensions,
Real estate,
Investments
One choice:
Getting through until the next paycheck
(It’s not wrong to want to be in the left column, and I assure you that you can)
We’ll examine wealth, poverty, and how social class affects one’s outlook on life in future posts, but today’s message is short and sweet. Human beings pursue money not because we are selfish, but rather because people value forging our own paths. Whether that path involves buying the shiniest new iPhone, stealing an expensive dinosaur skull, achieving financial independence, starting the world’s most successful charity, or just collecting sequential bills, you deserve that choice.
This blog will consider how we all can (hopefully) use our money more wisely to obtain… and retain… the greatest power on Earth: the power to choose.
The year was 2009. A college student had recently graduated with no job prospects, no assets, $110 in his checking account, a mountain of student loan debt, and not even a romantic interest. Sure, he’d done many of the “right things” (getting good grades, working campus jobs, and interning during the summer), but the economic reality of the times was setting in and the graduate wondered whether achieving the American Dream was only a myth.
Fast-forward to 2019. The student is now gainfully employed, happily married, student-debt free, and rapidly working towards financial independence. More importantly, however, he can unashamedly say that he is very happy and has a positive outlook on life.
How did he get here, and how can you?
Welcome to The Centsei, a blog in which we will explore the journey of how to improve one’s financial and personal well-being.
While the blog’s title may imply a Jedi-like “master/student” relationship, the reality is just the opposite. I intend to share all my experiences – the successes (some) and the failures (many). I hope that you, the Centsees (readers), will consider sharing yours as well.
This blog is about is how to live richly without spending a lot of money… and how to become wealthy both in mind, spirit, and wallet without sacrificing your integrity. There will be no articles about reusing toilet paper, eating lentils for a year, building your own 150 sq ft cabin in Montana, or shaving your back in the office bathroom to save a buck.
Our mindset begins with courage, habit-forming, effort, and planning. There are no shortcuts, secrets, or gimmicks.
• Courage to say “no” when your peers say “yes” • Habit-forming to help the difficult things become routine • Effort to understand human nature and its limitations And • Planning to forgo what you want today for what you’ll need tomorrow
(Purely a coincidence that this spells out C.H.E.A.P.?)
And don’t worry; I will never recommend something I don’t/wouldn’t use myself. Check out my disclaimer if you’re bored, a lawyer, angry at me, or a bored lawyer who’s angry at me.
Each blog post will have a financial well-being theme, summarized with a simple “Centsei Says” caption, as seen here:
The Centsei philosophy is simple; it starts and ends with “I can.” No specific background, education, or skill set is needed to benefit from this blog. You’ll just need the right mentality that you want things to get better.
• You can learn this stuff. • You can develop better financial habits. • You can be happy. • You can achieve peace of mind. • You will free yourself from the financial and emotional traps designed to take away your money, your free will, and your happiness.
All of your excuses for financial mismanagement are hereby banished. Forever. The thoughts of “it’s too complicated…,” “I’ll never be able to get out of debt…,” “I’ll just start later…,” or “it’s all rigged against me…” are excuses of the past.
The blog will also feature commentary from my trusty sidekick, Penny Why’s. While you might see nothing more than a flying piggybank, do not be fooled. Penny packs a punch! She will help us define complex terms, understand equations, and stay motivated on our path to financial independence… all while helping us understand the “why’s” of our conversations. .
(Penny promises not to hog all the puns for herself…)
The time to get started in your journey to financial success is now, and I hope my stories here can help.
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