“Beautifully Frugal” is a monthly blog in which Alex Miller of KerberRose Wealth Management shares insight she gained during her family’s journey to financial wellness. In her own words, her family is: “A house full of girls living beautifully and frugally on a written budget."
Not Knowing Where Your Money is Going
In the words of Donald Miller: “In the age of information, ignorance is a choice.” This was me. I thought to myself, if I never checked our checking account balance, I would never find or see a problem. I could spend what I wanted when I wanted and come out alright. The truth is, I was horrified of my checking account balance. I knew it would be a constant reminder of my failure as the “money manager” in our home. Yet, I was too prideful to admit I had a problem. I didn’t realize I had to change until I came face to face with completely running out of money. Don’t let this be you. You need to tell your money where to go, not wonder where it went. It all starts with making a budget the day you get paid and sticking to it!
Trying to Keep Up With The Jones’s
Since we live in 2022, I know this one affects us ALL. Before social media, you had to walk outside to see your neighbor roll in the driveway with their brand-new Mercedes. Now, everything is plastered online: every life milestone and large purchase is being celebrated and praised right on our smart phones. We go through a period of being jealous and feeling like we need the same thing, all to go back to our budgets and realize what we would need to spend to acquire it. Discontentment robs us of our joy. Chances are your “Jones’s” aren’t doing as well as they say on social media; it’s likely they are drowning in debt, barley scraping by, just to have the things we feel we need to be happy. You don’t want to keep up with that, do you? Teach yourself contentment and keep reminding yourself of your long-term financial goals when these feelings start to creep in. Practicing contentment will lead us to the financial future we are all hoping to have and leave behind to our kids.
Purchasing a Car You Can’t Afford
There is a reason why this one is after “Keeping Up With The Joneses.” Often times we tend to make purchases only so others think our lives are financially together—cars being one of the most common unnecessary purchases. We don’t need a sunroof, heated steering wheel or air conditioned seats. Yet, we think: “If I drive a nice car and people notice, they will like me more or see me as successful.”
Yes, cars are an investment we need; we need to be able to get to work every day and drive our kids to soccer practice. But the truth is, the only point of a car is to get you from Point A to Point B—you don’t need to look expensive doing that. Another truth is, cars are the only investment which depreciates in value by the DAY. You can buy a brand new car on Monday, drive it out of the lot, put 10 miles on it, and the next day it has depreciated over $5000—all because you drove it off the lot. Don’t fall into the trap of thinking you need a more luxurious car if you can’t afford it.
When it comes to purchasing cars, I always preach to save and pay for it in cash. However, if paying in cash is not an option for you, make sure you determine beforehand the highest amount you are willing and able to spend monthly on a car payment. Purchase a car you can truly afford, which will also allow you to accomplish all your other financial goals. Your other financial goals shouldn’t suffer just to acquire a nice car. As Dave Ramsey says: “It’s okay to have nice things, just don’t let those nice things have you!”
Taking Out Student Loans
Student Loans are like a silent financial assassin. An 18 year old can take out a student loan as easily as going to the store and buying bread. However, they can’t take out a mortgage, because they haven’t built enough credit. I’m not saying education is bad and unnecessary. On the contrary, I think continuing to grow and providing yourself with an education is equally as important as sorting out your financial life. I just want you to do it in a way you can afford. - one which doesn’t leave you with a mortgage-sized payment when you are done with school.
Feels a little oxymoronic, doesn’t it? Go to school, take out a bunch of student loans to pay for it so you can make more money, only to give all your money back to the student loan companies for the rest of your life—all because you didn’t fully realize the interest rate on these loans when you signed the dotted line. The student loan industry makes billions and billions of dollars on these kids only to rob them of their financial future later. Don’t let this be you. There are lots of ways you can pay for college, such as grants, scholarships, work study or getting a part time job while in school. Some schools even offer a cash discount if you’re paying upfront costs every semester—you just have to get out there and ask!
Giving Into Impulse Spending
Most of us impulse spend every day: grabbing a soda at the gas station, running to Starbucks just one more time since it’s on the way or needing “one” thing at Target. It happens to the best of us, yet teaching yourself the discipline of sticking with your budget so these things don’t happen will help you achieve your financial goals. When it comes to impulse spending, consider if you really need the item. Did you plan for it? Is it in your budget? I personally have a category in my budget for “impulses,” as I’m the type of person who has a really hard time resisting a Target run. I want to impulse spend a little, yet I don’t want it to break my budget. If you’re an impulse spender, that’s okay! Just write it in your budget, and once the money is used up for the month, be done! Impulses tend to add up overtime and can ruin all the progress you have worked so hard for with your money goals. Remember, we want to tell our money where to go, not wonder where it went. This is the key to financial success.
Final Thoughts
Mistakes are bound to happen. We’re only human, and we’re constantly learning what works best for us. My goal is to have you learn from my mistakes before you make the same ones. KerberRose Wealth Management cares about your financial health and we want all our clients to live successful financial lives. If you have any questions or need more answers, feel free to reach out to me personally. Even if I don’t know all the answers to your questions, I will make sure to put you in contact with someone who does!
Alex is one of our financial wellness advocates on our Wealth Management team. She is a mom of four, and her passion is sharing her own personal finance journey from living paycheck to paycheck and drowning in debt to finding financial peace. Alex's unique experience has given her the ability to help families take control of their own personal finances - all while still enjoying what life has to offer.
Contact: alex.miller@kerberrose.com