Most of what I know about money I learned in college. This is strange because I never took an economics course or studied business or passed an accounting exam. In fact, I had just three math classes in four years.
Well, actually, I had just one math class — statistics. I failed it twice and squeaked by on my third try. I’m glad I finally passed the class — now I’m able to calculate the mathematical impact of two failures on my GPA. (However, I still don’t understand standard deviation. It seems that when people deviate, they do so in an extremely non-standard ways.)
As it turned out, I didn’t need any formal money training in college. Every day was a self-taught lesson in financial survival. My folks were able to cover my tuition, but everything else — books and food and housing and extras — was up to me. Dead-set against going into debt, I was very creative with money: working two jobs, skipping classes for work, skipping semesters for even more work. And still, I went hungry a lot.
In my sophomore year, I made a gruesome discovery: I could sell my blood plasma for cash. So twice a week, I’d get a needle in my arm, a nice chat with the winos and prostitutes hooked up next to me, and enough food money to make it to the next visit. It worked out okay till one of those visits made me very sick. The doctor bill wiped out a month’s income. Lesson learned: certain investments are really, really stupid.
I took the next semester off to work full-time, saving enough to survive the new term with a maxed-out course load and no job. Before classes started, I made a budget. If I limited my food expenses to three bucks a day, I could make it on my savings. So I wrote down everything I spent each day, to the penny, and bought myself a chocolate reward every week that I stayed within the budget. I accepted every invitation to eat at someone’s home — even from people I didn’t like. I fasted one day a week, then broke it the next morning with a breakfast binge in the college dining hall, renting a meal pass at discount from a classmate who didn’t much care for breakfast. And I ate food from the trash.
Yep. It started when I was digging through the Safeway supermarket trash bins one day, hunting for cardboard boxes. I spotted some fruits and vegetables that had been tossed out. They were in sad shape, but there was nothing I couldn’t fix with a good scrub, a sharp set of cutlery, and the courage brewed inside an empty stomach. So I took some of these sorry specimens home with me. I ate them. Then I went back a few days later, and sure enough, I found more.
I made frequent trips to Safeway that semester, and sometimes, I even went inside. With this and the other tricks, I ate my way through the term on three dollars a day. Then I gave in and took out a student loan.
Even the Rich Have Problems
I could have learned a lot about money in a classroom: economic theory, accounting, and budgeting methods (as long as statistics wasn’t a prerequisite). Certainly, that financial information would have been helpful in my business life. But I’m pretty sure that the really important truths about money had to be discovered on my own. The most important one is that I need to know my income and expenses to avoid the misery that awaits me in the slim difference.
That truth applies in every circumstance, at any level of income. When I was a poverty-stricken student, my meager income was sufficient as long as I kept my expenses below it. Now I make more in a month than I made my entire senior year, yet the effect is still the same. If expenses exceed income, I’m done for. That’s true for everyone.
Even for a rich friend of mine. One day she told me that her life was falling apart over money. She and her husband had let their finances run amuck, and now they were having trouble scraping together the monthly mortgage payment. “How much was it,” I asked. “Thirty thousand dollars,” she replied. Oh. I knew she had a nice house, but I had no idea that their monthly payments amounted to twice my annual salary at the time. So much for offering to help.
It didn’t matter that she had a mansion, cool cars, spectacular clothes, and a ring with a diamond as big as a marble. What mattered was the difference between her expenses and her income, or lack thereof. The stress of it was tearing her marriage apart. In a strange way, I could relate. I felt the same way the day I pulled those first potatoes from the Safeway trash bin. Rich or poor doesn’t matter. It’s the difference between income and expense that counts.
The Key to Peace
No matter how great or small your income, there’s a delicious peace of mind knowing that there’s money left over at the end of the month. When it goes the other way — when you’ve spent every dollar and have to borrow against your future to pay for the now — there’s a sense of defeat and acute misery. You can try to brush it off, tell yourself, “It’s only money,” but you know that’s a lie. It’s not “only money” — it’s food, mobility, a place to live, a cup of coffee with a friend, and most of all, a sense that you have some control over your life.
I value these things far more than expensive toys, new shoes and trips to Europe. That’s a good thing because I don’t have the income to support those habits. And it’s not for lack of trying. But for some reason, God has chosen to bless me with a different kind of wealth. He’s decided to give me enough. Enough income to live on. Enough expenses to keep me out of trouble. And just enough of a difference at the end of each month to bring peace of mind. This “enough” thing isn’t plush, but it’s good.
Here’s the catch. Like all God’s blessings, this one’s breakable. To hold onto it, I’ve got to keep track of my income and expenses, make sure the former stays above the latter, and work smarter and live tighter when the difference starts to disappear. I’ve got no magic formula for doing this. I’ve just got a good budget … and a keen memory of what life was like without it.
Since I missed out on all those accounting classes, I don’t have a proper, official-sounding name for my budget plan. I just call it the Bonehead Easy Money Management System. It’s “bonehead” because, well, it works for even me. And it’s a “system” because it works for any level of income, whether you’re juggling a cool million or, more likely, digging through all your pockets trying to find quarters for the washing machine.
But you be the judge. I’ll tell you about the system in next month’s column. It’ll help if in the meantime you try to figure out your average monthly income and expenses. Nothing fancy — just come up with some rough averages. Don’t bother with the standard deviation. We won’t be going there.
Copyright © 1998 Todd Temple. All rights reserved.