More Happiness, Through Better Money Management

If this has been an ongoing issue for you, you have lots of company! Clay tokens inscribed with cuniform symbols, dating back to 4000 B.C.E. were used by the Sumerians to keep track of grain sales and other transactions.

Since then, our record keeping has pogressed quite a bit, but our struggles with money are pretty much the same. The reason most often given for the failure of marriages is disagreement over finances. 

In fact, I could sit here day and night for a year, writing about money and still not fully address all it's complexities. So what can be said here in a few paragraphs that can be of any help at all? Wait…I'm thinking. 

Okay, let's try this: 

Savings - The world is an uncertain place, and as such, you need to have insurance in the form of savings to handle unexpected developments, such a losing a job, health problems, automotive repairs and the like. We have insurance for so many other things, even life insurance to take care of our families after we're gone, but, ironically, we don't think of much more likely emergencies cropping and how we might handle them. So find a way to set aside as much as you can, preferably in a savings account, rather than cash, which is too easy to pilfer when temptation arises. A different saving account can be used to save for desires, like a cruise or a new car. But make sure not to mix or or dip into your emergency fund. It will provide peace of mind and a true lifeline when life takes an unexpected turn.

Credit - This is what gets most people into trouble; it's just too easy to use and then postpone the pain of repayment into the future. If you are disciplined enough to use a credit card, for example, and pay it within 30 days, before interest accrues, you are a rare individual indeed and can probably use credit safely. But for the rest of us, credit is another way for banks to get rich off of our hard earned money, using the psychology of "out of sight, out of mind" to their advantage. And the interest that is charged, if not paid off in a timely fashion, will compound and can actually exceed the amount of the original charge, in which case, you will be paying more than twice for the service or item you originally purchased. Not too smart! Right?

My advice: carry a credit card for emergencies and forget it. If you do use it, pay off the balance as soon as possible, so as not to accrue interest on the purchase. Some other types of credit are necessary, such as that used to buy a home or to replace an old vehicle. But really examine your long term income prospects and existing debt to ensure you will be able to afford the additional monthly expense. If not, better to wait, save what you can and develop a plan to achieve your goals in the future. 

Debit cards - I have found that this is the most efficient way for me to manage my money. I keep track of what's in my bank account and how much I have to spend. I know I cannot spend more than I have, therefore, I will not be accruing any debt. The disadvantage of a debt card, relative to a credit card, is that if it is stolen and used to purchase items without your consent, you may lose the money in your bank account for good, especially if you don't report the missing card and or the unauthorized charges immediately. Credit cards on the other hand are initially using the bank's money and if the card is stolen or misused, the bank can begin an investigation to determine if a crime was committed. If so, you will not be held responsible. But remember, credit cards carry the potential of being able to accumulate your purchases, which can easily snowball out of control. So be careful!

Money problems have the potential to ruin your happiness and sense of control over your destiny. So treat your money as you would any valuable relationship, with care, forethought and consistency. If you become depressed because you can't have what you want, when you want it; remember, most of the world's population has trouble meeting their basic needs for food, shelter and medical care. If you have those covered, you are doing better than you think. Be grateful and develop a plan to achieve your goals, through discipline and thoughtful choices.