How To Make Money Despite Yourself

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A Step-by-Step Guide for the Determinedly Dense

 

“I just don’t understand numbers”.
“I want to invest, but I just don’t know where to begin!”
“I don’t want to think about all that stuff!”
“Finances are so boring!”

 

Does this sound like you? If so, today is your lucky day! You have had the good fortune to run headfirst into a guide that will lovingly hold you by your special snowflake hand and lead you, kicking, screaming and whining all the way into responsible financial adulthood. And yes, once you have read it all, you may use #adulting when you tweet about your experience.

Step 1: Head Extraction

 

The first step is the trickiest one of all, so follow along closely. Once you have this step nailed, the rest will be relatively smooth sailing.

It isn’t going to be easy. I won’t lie, it will probably hurt more than a little. But I do promise it will be well worth it, and I’ll be right here the whole time, cheering you along. See? I’m wearing a cheery smile and have my little pom-poms handy.  And you know how much I fucking hate pom-poms. Almost as much as I loathe cheery smiles.

Slowly, ever so slowly, extract your head out of your arse. Careful now, we don’t want to hurt the old noggin. Despite all evidence to the contrary, it can probably still be put to good use.

Look, I know you’ve got used to having it in there. What has it been? Coming on three decades maybe? It is comfortable. It is familiar. Change is a pain in the butt. But can we be serious honey? So is having your head stuck up in there. So come on out and smell the roses. I promise it will be an improvement.

There you go. That wasn’t so hard now, was it?

Well done.

Step 2: Understanding Numbers

 

Now that you’ve had a minute for your eyes to adjust to all the light, we’re going to learn just a wee bit about numbers. This is an important step seeing how numbers are the backbone of all things finance. Bit tricky to do finances sans numbers.

 

This is a number:

3568

This is a monster:

Image credit: http://www.shzongyue.com/data/out/85/39425133-monster.jpg

I understand that you sometimes confuse the two. Easy mistake to make. Happens to everyone.

Monsters are scary.
Numbers are not.

Well, most numbers are not. Imaginary numbers have always scared me just a tad, but thankfully we don’t have to deal with those fuckers.

 

 

This is a number:

320

This is surgery:

Performing a surgery is a complex task and mastering the art requires years of expensive training (plus folks tend to die when you get it wrong, so there is that).
Mastering numbers to understand and get a grip on your finances is not complex and does not require you to possess an advanced degree (and if you get it wrong, death does not result. You lose some money, gain some wisdom and move on with your life).

 

Step 3: Get Your Head in the Game

 

You have been labouring under a misconception. A misapprehension, if you will. Maybe even, if I may be so bold, a huge fucking misunderstanding of the basic facts of life.

 

Understanding and taking control of your finances is not optional.

 

You floss with some regularity, right (I mean not as often as you claim you do when you go to your dentist, but still)?
You pay your rent or your mortgage?
You ensure that your dog is fed?
You manage not to punch that dick at work in the face even though he so richly deserves it and is practically begging for it every day?

Excellent. So you do have an understanding of the fact that, as a responsible adult and a member of this society, some things are not optional.

We don’t have to love them. Hell, we don’t even have to necessarily like them (does anybody actually like flossing? Ugh). We do have to do them.

Why, you ask, pouting petulantly in that way that you think makes you look adorable but really it just makes me ache to smack you, is financial literacy not optional?

I’m glad you asked.

You really only have a few choices:

Option 1: Be born with a silver spoon between your teeth or marry someone with precious cutlery clenched firmly between theirs (and never, under any circumstances sign a prenup).

Option 2: Be brilliant and talented and blessed with good luck, and wait for the money to rain down upon you.

Option 3: Wait under a bridge to die, shivering in the cold or be a huge ass burden on your most unfortunate progeny.

Option 4: Be financially literate and responsible with your money.

If you picked one of the first three options, tuck your head right back into your nether region and be on your merry way.

For those of you who picked option 4, here is your red pill. Please follow me down the rabbit hole.

 

Step 4: Where Are The Tools?

 

You will be pleased to hear that learning about personal finance does not require you to sacrifice chickens and dance naked under the moon with a wart on your chin.

You just need to be willing to read or listen.

I understand that it may have been hard, given where your head has been until recently, to keep track of all the new and wonderful happenings in our world, so I’d just like to call your attention to a couple of things.

Thing 1: The Internet.

It is wonderful. It is the eighth wonder of the world, and also a cesspool, all in one amazing, sprawling, mind-boggling package.

Everything you need to learn about managing your money is just a few clicks away.  There are blogs, videos, podcasts, forums: you pick your poison.

Thing 2: A wonderful invention that will make your personal finance journey ever so simple to navigate. Index funds.

The stock market is one of the best and most accessible ways to build wealth. It can also be the easiest way to lose wealth. In the bad old days you either had to spend a gadzillion hours studying companies, attempt to pick individual stocks and hope against hope that you didn’t fuck up big time or you had to entrust your stash to a money manager and pay him an obscene amount of money. Now, we have index funds and participating in the stock market could not be easier or cheaper.

What exactly is an index fund you ask? The next section of the guide will deal with that and more.

Step 5: Let’s talk specifics

 

That is all very well you say, more than slightly indignant. But the Internet is a large place and I don’t quite know where to start clicking.

Fret not. This guide is nothing if not helpful. Here is what you are going to do.

Start with this personal finance flowchart from the subreddit /r/personalfinance. Figure out where you are on the chart and what your next steps need to be. Join the subreddit and ask questions.

You will notice that the first step in the flowchart is to create a budget and find out where your money is going. Mint is what I use for budgeting and tracking day-to-day expenses. It is free. Other folks swear by YNAB, but I’ve never used that myself. What tool you use isn’t nearly as important as using something, anything, to figure out how much money you spend and what you spend it on.

I’d also like to suggest the book that I started with after I underwent my head extraction procedure:

Ramit Sethi’s most cornily named I Will Teach You To Be Rich.

This book is a step-by-step guide to getting your financial house in order. What I liked most about it is that it is an extremely practical book, with very specific suggestions about bank accounts, credit cards, brokerage houses etc. Every chapter is actionable, and when you are digging yourself out of a hole it helps to feel that you are making continual, measurable forward progress.

 

Once you’ve got the basics nailed and are ready to move on to investing and making your money work for you, this is what the guide suggests:

These three resources will help you get started with a simple, non-overwhelming portfolio of index funds that will put your money to work.

 

At this point you will be well equipped to let go of the guiding hand and explore the rest of the financial universe at will. The best part? If you do no more reading and take no further action, you will still be in a pretty darn good place.

Parting Words

I spent altogether too many years of my life being extremely stupid with my finances. I wish someone had called me on it and smacked me hard upside the head.

If this guide seems harsh, Dear Reader, know that it comes from a place of love (tough love, but love nonetheless). I am doing unto others what I wish someone had done unto me.

Go forth without fear, whining and excuses and master your money. You can do this.

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16 thoughts on “How To Make Money Despite Yourself”

    1. Thank you! I think a lot of folks suffer from the numbers are scary mindset. They may be scary, but they can’t be scarier than running out of money when you are 70.

  1. I’m fortunate my head is out already! Very entertaining indeed and very helpful to understand the difference between a surgery and handling number.

  2. Love the tough love here, Mrs. BITA! As difficult as it may seem, you illustrate that it’s not that scary. And, is it ever worth it! 🙂

    1. Thanks Amanda. So, so worth it. I just kick myself for not undergoing my head extraction process earlier.

  3. My hope is that we’ll help enough people learn that managing our money isn’t actually scary or hard at all, and enough people will get in the game that our kids’ generation will be much better off without nearly so much debt or wasteful spending. Though, I wonder what that would do to the economy as a whole…

    1. It might be nice to find out I think.

      Thank goodness for Bogle – none of the stuff about it not being scary or hard would be true if it weren’t for him.

  4. A great message that needs to be spread and spread and spread: Use your head! Think about your money, control it, don’t just go with the masses, they want you to spend it all!

    Thanks for the great post!

    1. Once you see the light it is a bit hard to ignore the poor souls still in darkness isn’t it. Preach!

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