Trent at The Simple Dollar found this article about why people are so averse to saving money. The main gist is, people spend money because they believe that they will become somehow happier in doing so. I’ve certainly felt this. When I plunked down $600 for my phone, I really didn’t think too much about the money. I felt happy, because I was getting something that I really wanted.

People cannot easily imagine how not spending money could bring them happiness. In the long run, however, it will. You’ll have a big, safe emergency fund; your kids won’t have to worry about how they’ll pay for college; you’ll collect together a healthy nest egg with which to retire early. The problem is, humans are naturally shortsighted. We don’t have emergency funds because we don’t think there will be emergencies; accidents happen to other people. We haven’t started saving for our kids’ college educations yet because there’s obviously still time. We don’t squirrel away enough money for retirement because retirement is something old people do. Young people buy cars!

You can blame marketing. Well, you can partially blame them; it’s not like you’re being forced to listen to them. But we’re exposed to so much of it, especially on TV, which the average American spends four hours a day watching. Four hours of staring at a fixed point and being sold stuff every ten minutes!

The solution to that, of course, is to just not watch TV.

Inconceivable! Right? Actually, I don’t watch TV anymore, with rare exceptions given to Lost and Battlestar. How is that possible?! Maybe I should talk about that some time.

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When you go through an epiphany like mine, it tends to lead you on a course that reveals to you that you’ve been doing everything completely wrong. Think you’ve been managing your debt properly? Nope. You haven’t. Think you’re ready for when disaster inevitably hits? Nope. You’re not.

It’s a tough thing to take, and there are three ways that you can react when a big reveal sets upon you and you discover that you’ve been acting like a retard about something for years without knowing it:

1. Defensiveness — This is the most common reaction. Someone comes up to you and tells you how to do something that you already think you’re doing just fine on your own thank you very much. You argue, you get angry, maybe you even get into a fight. No matter what happens, though, you never accomplish a damn thing.
2. Depression — Second most common reaction. You find out that you’ve been screwing something up, which makes you feel like your whole world has come crashing down. You spend the rest of the week sulking, and you never bother to change. After all, why should you even try to change when you’re clearly a complete screwup?
3. Excitement — Best, but least common, reaction. You find out that you’re doing something wrong, and you immediately see it as an opportunity to make a positive change in your life. Maybe you get a little gung ho about it, maybe you even overdo the changes a little, but you change, and willingly so. Life improves.

When I thought about this, it became crystal clear why I’m so crazy about money talk lately: I reacted as per bullet #3 when I found out that I didn’t know anything about money.

If you fall into categories 1 or 2, that’s okay, as long as you don’t stay like that for too long. Relax. Take a deep breath. Get a good night’s sleep, maybe two, and then reexamine your mistake another day when the visceral reaction has passed.

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So, confession time. Why am I so hopped up on personal finance allasudden?

Background: I’m 27 years old. I’m just a baby. I still have my tail. What 27 year old goes into a lengthy discussion about the merits and disadvantages of two different retirement plans? After all, retirement is still sixty years away, right? Saving for retirement is for old people!

That sounded retarded, but you’d be surprised how many people think that way. Take a trip to Target one day and just listen to people’s conversations as they pass by. Are the couples there talking about whether they have enough emergency money saved up to cover them if they lose their jobs? Are their investments properly diversified? Do they know what each other’s net worth is? No, they’re talking about last night’s American Idol and how it relates to whether they should buy this TV that they can’t afford but that’s what credit is for anyway so it’s all right.

I hope you’ll be wiser than that.

It’s definitely to my credit that I’ve been saving for retirement since I entered the workforce at age 24. Because of that, I have about $23,000 saved right now, and assuming the stock market maintains its historical averages and that I keep my weekly contributions to the fund proportional to my income, I should have about $1.2 million when I’m 60 years old.

However, starting on my retirement savings early was the one and only wise move I made during my first two-and-a-half years in the real-ish world.

Where do I begin? I started saving to buy a home almost immediately after moving into my old apartment, but any time I wanted to make a big purchase, I dipped into those savings. I suppose it’s comforting to an extent that I own a 61″ TV, but I ended up buying my condo way before I really had enough saved up to make a decent down payment, and now I have way more debt than I should.

Now, I like where I live now. It’s a really nice home. The next big mistake I made, though, was that, despite the fact that my living expenses instantly doubled due to association dues, higher energy bills, and twin mortgage payments, I continued to live as if I was paying all of $850 a month for housing.

I had enough in my savings to sustain this pattern for about five months, and then a hefty tax refund stretched that out to eight. Among other things, I spent $600 on an XBox 360 and a bunch of games, $600 on an iPhone, and $1300 on a height-adjustable desk (which is actually the one purchase I do not regret, because I love being able to stand up while I work now). I kept spending and spending, and then, in August of 2007, the unthinkable happened.

I carried a balance on my credit card for the first time in my life.

Okay, so maybe that doesn’t seem so bad. Everyone carries a balance, right?

Everyone also dies. That doesn’t mean I should, too. And if I’d carried on with my spending past that point, the stress of the bills might have killed me by now.

I’ll grant you, carrying a balance just once isn’t terrible. But you have to keep in mind, I had never done it before, and when I got hit with that first finance charge, it stung. Here I was being charged $50 in interest. That’s $50 that I could have spent on a Wii game, or a night out, or food.

I realized immediately that I had screwed up, and I began scouring the Internoodle for a way out. Needless to say, there wasn’t one, and I knew there wouldn’t be. What I was really looking for was knowledge of how to keep this from happening again.

I spent that evening reading all kinds of webs and blogs and thingies. I took a night to scold myself for my stupidity. I took another night to scold myself for my unrelenting idiocy. And then I worked out a budget.

I had finally realized that I had been spending more than I earned for almost an entire year. I’d even been thinking of financing a new car at the time! That hurt enough, but then I discovered what I could spend without causing myself further financial harm, and my heart sank. I thought that my standard of living was about to plummet.

That’s the point that most people get to: When they realize that they cannot maintain their spending habits, they immediately decide that they are not willing to sacrifice the quality of their lives, and so they change nothing. Luckily for me, my lifelong aversion to debt was more than enough to override that. And truth be told, my quality of life hasn’t changed at all!

I think this is just a growing experience that everyone goes through eventually. I’m grateful that mine happened at such a young age. Just the fact that I’ve already realized things need to change means that I’m in way better shape than most people.

I guess I just want to share now. So, over the next indeterminate amount of time, I’m going to show all of you how I manage my finances, down to the tiniest minutiae. There are already plenty of personal finance bloggers out there; I have no desire to be another one, and the market doesn’t need more anyway. I’m just going to lead by example here, with complete transparency, even divulging my salary and expenses down to the cent.

Next time I talk about money Some time soon, I’ll walk you through my management system. It’s a simple arrangement of savings accounts and spreadsheets that I’ve found works incredibly well for me. I’ve only felt stressed about money once since I started using my system, and that was only because my car needed work this month.

People get really intimidated by finances. Maybe I can show everyone that they don’t need to be. Then again, everyone who writes about this stuff says that. Hmm…

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My soon-to-be brother-in-law sent-me-this video about global warming. It’s the best discussion of the issue I’ve ever seen, although I was a little disappointed that the author eventually took a side on the whole thing, even though I ultimately agree with him. One way or the other, it’s put global heatering on my mind, so, what the hell, let’s rant.

What do I think?

Here’s the thing: Can we really deny that belching smoke into the sky is bad? I mean, gods, if just my farts are enough to make my cats sneeze, imagine what a coal plant is capable of.

But are we really causing the planet to heat up? I mean, yeah, Earth is definitely warming, we can’t pretend it isn’t, but is this really all our fault? There is evidence to suggest that Mars is experiencing planetwide climate change, too. If that’s the case, it raises the question of whether Earth is simply a victim of a rough patch in the local solar cycle. Maybe we haven’t done anything wrong at all!

Awesome, right? We can go back to deforesting now? No big deal?

Man, no. This isn’t a black-and-white thing, no matter how badly the activists on either side want it to be so. The choices are not, “Humans are microwaving freaking everything,” and, “Humans never do anything bad to the planet ever.” It’s probably a mix of the two. Personally, I do not believe that we are 100% to blame. I believe that this is part of a normal solar/geological process. Maybe we have a hand in it, sure, maybe even the majority hand, but the kicker is this:

What I believe is irrelevant.

If we are at fault in any way (whichwemightnotbebutitdoesn’tmatter!), it behooves us to knock it off, and not to save the planet! Who cares about the planet? It’s just a damn rock! The issue here isn’t saving Earth; it’s saving us. There are so many things that we need in order to survive, and Earth can only really provide us with those things when we leave it to do its thing. We need oxygen; plants make oxygen when you leave them alone. We need a reasonably temperature-regulated environment; the atmosphere and local land features keep the climate steady if we don’t mess with them too much. We need to not be immersed in water higher than our noses; the ocean doesn’t go up that high if we stop adding water to it that’s supposed to be ice in the North danged Pole.

Shut up shut up shut up.

Part of my problem with this debate is that, as with all debates, people are taking sides and treating it as an epic, good vs. evil confrontation. People who believe in global warming think that those who do not are evil, and vice versa. It’s retarded. It’s why I hate debate so much.

I believe that the issue of harmful climate change is being used as a political platform above all else (on both sides!), and it’s sad. It’s just another manifestation of the awful state into which all power-based political systems are doomed to descend: a system of greed. Those who desire power will do anything to get it, and damn anyone else. The politicians do not care whether Earth’s global climate is metamorphosing in any way: they just want their power, and they’ll say whatever they need to say to get it.

I hate that this is a political issue. It’s more important than that. You know what? Yes, it’s entirely possible that global warming isn’t something we need to worry about. But with all the energy that’s going into pissing about whether climate change is real, we could have made big progress towards fixing it by now. When the money you would spend deciding on something is equal to what you would spend ending the debate and just playing it safe, people need to clam up, swallow their pride, and go do the work, whether it needs to be done or not.

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You might be wondering, “What the hell was that all about?”

It’s an odd thing to see, a long discussion of a personally financial nature on the website of one Raymond Louis Merkler Jr. So, what just happened?

I’ve been wanting to tell you this for a long time, but I’ve been so afraid of what you’d say. We’ve been together for so long, and it’s not that I don’t trust you, it’s just…

Look, it’s me. I don’t have the kind of confidence that lets a person call out to the world the way I should. I’ve shielded everyone from the truth about me, but you, I think I can tell you.

I’ve embraced Capitalism.

Okay, I knew you’d react that way. See, this is why I didn’t want to–

No, no, I’m sorry. I’m not mad. I’d react like that, too. Just… Really, I’m sorry. Just let me explain.

I’m still a Communist, I promise. I honestly believe that an economy based on universal fulfillment of all basic needs can work, can even operate without money, given a populace of sufficient individual maturity.

But, see, humans are still selfish. We still place our wants above other people’s needs. It’s a shame, but maybe, someday, we can make equality work.

For now, though… Look, I’ll always hope for a society of fairness, but right now, I need to look out for me and my own.

I realize that the acquisition of wealth can only be accomplished at the expense of others. I’m not proud of it. But I want to be free of the reins of the corporate workplace some day, and if I’m going to do that, I need to work my way towards financial independence. I haven’t changed deep down, I promise! But right now, I need to take advantage of the system, and then eventually, I can start using the system to serve my ideals.

Some time soon, I’m going to explain what got me onto the personal finance wagon. It’s… oddly fun, believe it or not. I’ll talk on this later.

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