I like to think of myself as pretty knowledgeable about money. After two and half years writing this blog, and even more time spent following other blogs, reading personal finance books and magazines, and generally keeping myself pretty well educated in the ways of money, I think my financial knowledge level is well above that of the typical American (given how little the average American seems to know about money, that’s not saying much, but I’ll still take it).
The problem is that, no matter how much you THINK you know, it’s still possible to make some foolish money decisions. This has been the case for me throughout this summer. If you check my Net Worth Updates for the past several months (as I just did), you can see a rather depressing pattern.
In May, I was doing pretty good, cutting down my credit card debt and generally doing pretty well financially. June was less successful, as I started to add on more credit card debt, and July was more of the same, as I added nearly five thousand dollars in credit card debt. By the start of this August, I had nearly maxed out both of my credit cards, and have been doing pretty badly at cutting down the amount owed.
How Did This Happen?
Well, I’ve mentioned at various points (usually during the above mentioned Net Worth Updates), it’s been a surprisingly expensive summer; between helping my fiancee pay for her dental work and trying to get the air conditioning in my car back in working order, I’ve spent thousands more than I would have otherwise. Add in the lower pay I’ve been making over the summer months (and graduate student pay rates aren’t exactly fantastic in the first place), and it’s been tough to keep my head above water, let alone make progress in getting my finances in order.
But the real fault lies with me. While there were plenty of unavoidable expenses (or at least expenses that were quite tricky), there were also plenty of spending that I could have gotten under control if I wanted. I have gone out to dinner quite often this summer, I’ve taken several trips (even if most were only for a night or two), and I haven’t been very frugal with my food and other general spending. I told myself, ‘Well, I’m adding to my credit card debt, but I will be getting student loans at the end of the summer (August 19th, to be exact), and then I can pay off most of my (student-related) credit card debt. Everything will be fine in the end.’
As I’m sure most of my regular readers are probably already assuming, the 19th has come and gone, and I still do not have any student loan money. You see, the faculty at YSU (my graduate school) are in discussions about their pay (and may strike), and until the university knows for certain whether there will be a Fall 2011 semester (or at least, when it will start), they maintain that the US Department of Education won’t allow them to release the student loan money to me, or any other students. (I will admit, I do wonder whether that’s really the case, or whether the university is withholding student loans as a way of adding pressure to the professors in the form of students begging them to resolve their issues. Since I’m not getting student loan funds until the issue is resolved, regardless, I suppose it’s a moot point, though.)
I’m not writing all of this to get pity. I’m not writing it to pull at your heartstrings. And I’m definitely not writing it to try to get you to send me money, or anything of that nature. No, I’m simply writing it to note that sometimes the best laid plans get thrown off for reasons well outside your control, and that it’s important to consider such events, and try to prepare for them.
How could I have prepared for this strike? Well, I could have saved more money from my last set of student loans, so I’d have something available in an emergency fund for this situation (or any other situation where my expected cash flow was lower than I had planned). I could have controlled my spending, particularly my credit card spending, so that I would have some credit available now. I could have done more work in building alternate income sources (my blog is nice, but all the money I’ve earned through it to date would barely cover my expenses for a month). Most of all, I could have made contingency plans so I wasn’t caught so off guard by this situation, and didn’t have to depend so heavily on others for my own financial needs.
All of this is to say, sometimes, life will get the best of you. The best way to get the best out of life is to be prepared for the negatives that might affect you.