Maybe you know someone who seems to have it “all together”. They don’t complain about not being able to afford things. They have a nice house and a nice car. Their kids are always wearing trendy clothes. And you wonder, what is their secret?
Maybe they just use financial common sense to manage their money wisely. Maybe they hit the lottery and didn’t tell anyone. Or maybe they’re secretly swamped with debt.
Just like not being able to judge a book by its cover, you often can’t judge a person’s finances only from the glimpse of small parts of their lives that you see. You may be able to decipher small clues, but the big picture may be much different.
For example, I knew of a family that had a nice car, free military housing, and not a huge abundance of possessions. They were a very small family in which both parents worked. From the outside, they seemed to have it all together. However, they had over $20,000 of credit card debt and not much to show for it.
In contrast, I also know of a family of 5 in which the mother is a stay-at-home mom. They live in a small 2-bedroom house, never go out to eat, own used vehicles, and a huge portion of their wardrobe is second-hand clothes. From the outside, they look poor. However, they receive no government assistance, tithe 10% of their pre-tax income, contribute a portion of every one of the husband’s paychecks to his retirement account, invest hundreds of dollars every month, have savings accounts and investment accounts for each of their children, and plan for the husband to retire significantly earlier than most would expect.
If someone were to look at your life, what would they figure your finances to be? If they looked at the inside of your checkbook, would their assumptions have been correct?
It doesn’t matter what your finances look like to other people, and it shouldn’t matter what other people’s finances look like to you. You don’t have to keep up with the Jones’s anymore than they have to keep up with you.
Your finances aren’t about other people. They’re about what works for you. Use your finances to accomplish your goals. Do you want to live frugally so you can retire early? Do you want to spend your money on a vacation that will provide you with happy memories for years to come? What are your financial goals? Whatever they are, use your finances to accomplish them, not to keep up with everyone else.
Article by Randi Millward