This year continued to offer me many good financial lessons. The previous two years were kind of a financial shock to me (and probably to the rest of America) with all the panic, job losses, foreclosures, and other crises, but the year 2010 drove home some core financial values. I can say that I am ending this year with five money lessons learned.
First, debt is not good. I had never given much thought to carrying credit cards with balances, and having other debt including a student loan, car note, and mortgage. When the economic recession really hit hard and the banking industry (in which I am employed) continued its layoffs, the light bulb finally went off in my head. I realized that my income is not guaranteed and that I needed to make steps to becoming debt free. I committed to paying down my debt and have paid down $5,000 this year.
Second, I pay for convenience, but I can do a lot of things on my own. Along with freeing up cash by paying down my debt, I realized that I could save even more money by doing things myself, for example, making nutritious meals for myself and my family instead of eating out, making coffee at home, and actually getting on my hands and knees to clean my own mess instead of hiring a maid service. I probably save $200 a month by making most meals at home instead of eating out twice a week. And that $250 per month that I was paying the maid is much more appreciated in my bank account.
The third lesson I learned this year is that time is money. I had heard this phrase many times before, but it didn’t mean all that much to me until I realized how much time I had that was unaccounted for. Much like figuring out where your extra money goes when trying to implement a financial budget, I needed to implement a time budget. Once I recognized that I wasted many hours watching television and reading Facebook postings, I realized that I could be using my time in a more productive way, such as writing for Associated Content or working on my personal blog.
Fourth, I learned that there is still some money to be made in real estate. Now is probably not the ideal time to sell property, but it’s definitely a good time to invest in rental property. I have seen condos in Charlotte in relatively good condition sell for less than $30,000. At this price, positive cash flow over the long-run is almost certain.
Finally, I realize there is still money to be made in the stock market. It is true that the stock market has dropped as a whole. However, lower stock prices (on what I deem to be good, solid companies) mean I can purchase stock from companies I could have never afforded. I can buy more of their stock, too. My personal investments in yielded a 25-percent return so far in 2010.
Looking forward to 2011, I plan to continue my plans of saving money, paying down debt, and investing. I now know how quickly a person’s financial situation can change, and I want to be sure that I will always be in a position to withstand a financial drought.