The job paid well, and my expenses were low because I never felt inspired to spend for the sake of showing people how much money I had. I certainly wasn't wealthy, but I was able to live well within my means and save money for investing and retirement. I had my finger on my financial pulse constantly, maybe even obsessively, and I was headed in the right direction.
As I said, it really didn't take much to turn it all around.
Much like the Great Recession itself, the causes were varied and deep. The job increasingly was a worse and worse fit, and working for myself seemed a good idea. Some bad business decisions and a tanking economy had me working ("consulting") for others before long, at least part-time, while I tried to figure out how to increase cash flow and not live off my savings. There was enough left, thankfully, for me to be able to partner with my wife to buy a house; she had the income to qualify for the mortgage, and I just barely had enough to get us the down payment.
And so we headed into this country's economic downturn: getting by, living in a house which somehow managed to stay worth more than what we owed on it, looking for better ways to bring in money and not paying attention to where it was all going.
That's right, not paying attention. The greater the money problems, the less you want to think about them. You don't want to check the bank balance, you certainly don't want to see how your retirement funds are doing in an endless bear market, and overall, the word of the day is struthious. (In the present economy, maybe the operative word for what many people think about their money is santorum, but that's entirely too offensive to discuss here. I'm only linking to that site so it stays atop the Google rankings.) It's easy to stick your head in the sand and simply hope the money problems go away.
It may be ironic, but in order to honor Ploutos, the blind god of wealth, I'm heading into this year with my eyes open. I want to see what I used to see: all the financial information and trends in my life. I'm not interested in worries, mind you; I find thinking like, "Oh, we won't have the money to pay all the bills!" to be completely counterproductive in all circumstances. You don't look at money to worry about it; you look at money to control it. If you worry, you start to fear again, and then you look away. The only way money will be one's ally is if one can look upon it dispassionately.
The shiny new tool in my toolbox is Mint.com, a service that allows me to view the family's full financial picture in one place. Mint.com is a free financial tracking website which is safe and secure. Part of the security comes from the high-end encryption that they use, but it's also safe because you can't actually move money around from within that site; you have to go to your bank or other financial site to handle the transactions.
The site has pre-figured budgets based on your current income and expenses, which can be tweaked and modified very easily. It can send you alerts about things like low balances, overdue bills, and suspicious activity. They make their money on referrals, recommending things like credit cards and mortgage refinances from their partners if you could use something like that. I haven't found the marketing to be intrusive.
Peeling away the film of ignorance and taking a hard look at your finances is the prerequisite to taking control of money instead of letting it control you. I firmly believe that compound interest is the most powerful force in the universe (even if Einstein didn't really think so), and that it works on people whether they pay attention to it or not. In future posts I'll look at the ways that compound interest has positively and negatively impacted my life. Insofar as money is, indeed, congealed energy, compound interest shows that it follows some sort of rule of abundance.
The question to answer, of course, is abundance for whom?