HUNT VALLEY, Md. (TheStreet) -- In this special guest series of guest posts from four noted authors and bloggers on money and life, you're in for yet another treat.J.D. Roth is an accidental personal finance expert. For more than five years he's been writing about smart money management at Get Rich Slowly. He's too humble to tell you himself, but his blog was chosen by Time as one of "The Best Blogs of 2011."
|The author of Your Money: The Missing Manual admits to starting out with plenty of money troubles of his own.|
My story isn't unique, and I know that. Lots of people make dumb mistakes. But when you're living the dumb mistake, you feel all alone. You feel helpless. When you're in debt, it feels like you're drowning, like you'll never make it to shore. Here we are in 2011, though, and things have changed. Seven years ago, I had more than $35,000 in debt and was falling further behind every year. Today I have more than $35,000 in savings -- and I pull further ahead every year. How'd I do it? Well, I didn't win the lottery, and I didn't rob a bank. Instead, I spent several years making small, subtle changes. I learned how to live a frugal lifestyle, cutting back on the things I didn't really need (like cable television). I discovered the debt snowball, a sort of mind game that allows people like me to finally pay off their debt instead of just wishing they had. I started to save for emergencies, for retirement and for fun. I worked long hours to bring in extra income. All of this was hard work, but it paid off. In December 2007, I became debt free and I've remained so ever since.
After more than five years writing about money, I've learned quite a bit just from personal experience. I've also learned by talking with my friends and neighbors, and from exchanging email with thousands of readers. What have I learned? Here are some of the most valuable lessons:
- Money is more about mind than it is about math. Financial success is more about mastering the mental game of money than about understanding the numbers. The math of personal finance is simple -- spend less than you earn; it's controlling your habits and emotions that's difficult.
- The perfect is the enemy of the good. Too many people never get started putting their finances in order because they don't know what the "best" first step is. Don't worry about getting things exactly right -- just choose a good option and do something to get started.
- Do what works for you. Each of us is different. We have different goals, personalities and experiences. We each need to find the tools and techniques that are effective for our own situations. There's no one right way to save, invest, pay off debt or buy a house -- and don't believe anyone who tells you there is. Experiment until you find methods that are effective for you.
- You can have anything you want -- but you can't have everything you want. Being smart with money isn't about giving up your plasma TV or your daily latte. It's about setting priorities and managing expectations, about choosing to spend only on the things that matter to you, while cutting costs on the things that don't.
- Nobody cares more about your money than you do. The advice others give you is almost always in their best interest, which may or may not be the same as your best interest. Don't do what others tell you just because they hold a position of authority or seem to have a persuasive argument. Do your own research, get advice from a variety of sources and, in the end, make your own decisions based on your own goals and values.
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