I think it starts with choosing a career.
In Pippin, the title character sings about how he disdains the idea of ordinary tasks, ordinary jobs – when you’re extraordinary, like he is, he musically explains, you have to do extraordinary things.
I mention this because I’ve talked to more than a few wanna-be actors, musicians, and philosophy majors who seem to think that as long as you’re happy, the amount of money you make is meaningless.
Ah, what a beautiful world we’d live in if that were true. In fact, I think a responsible adult has to balance job satisfaction against money. There are undoubtedly reading-comprehensive challenged individuals who will make hash of this claim. But read it again: I’m not saying that compensation is the sole factor in choosing a career. I’m saying weight should be given to it, strong weight. It’s not determinative.
Then I think people should live within their means. I don’t know too many people that do that. I grew up poor. When I started making money, I continued to live a very simple life. I let money accumulate against a future storm. I think someone ought to be able to live a year at their present expenditure rate even if they lost their job tomorrow. If you say that’s an impossible goal, I’m going to say that it’s a fair bet you’re not living within your means. I was the last of my neighbors to get cable. Right now, I drive a 1996 car. Why? Because it gets me where I want to go and doesn’t have bad repair costs. I bought it new in 1996, for cash, and I’ll drive it until its repair costs are excessive. Then I’ll buy another car.
If you’re paying interest on a car loan, you’re probably living above your means. If you rely on credit for ANY purchase other than a house, you’re probably living above your means.
All my neighbors have late-model cars. I have the oldest car on the block.
But I guarantee you, if some financial disaster happened to one of them, they’d whine about how unlucky they were. They’d never think, “Gee, maybe I shouldn’t have a new car every three or four years.”
I have a section of my basement stocked with food, potable water, basic medical supplies, weather gear, emergency money. If a blizzard stranded us at home for a month, we could survive.
There are a host of specifics that make up reasonable financial prep. But I firmly believe the vast majority of people want to live a much higher lifestyle than prudence would dictate. And if you told them this, they’d hotly deny it.