Friday Finances.

I’m changing up what I do on Friday. Saturday can be about fitness and mental health, but you do need money to take care of physical health. Kea and I went into the local butcher a couple of days ago to get meat for us and the dogs. That cost. A fair bit: what used to be a year ago $16 a kilo is now $24. So you have to get ahead.

And here the temptation is to put it on the credit card. But that will bite you. To quote Wilder on debt:

Houses don’t count, as long as you live in them and don’t consider them an investment. I understand that few people have the cash to buy a house, so everyone gets a pass there. Heck, I’ve paid off most of my mortgage, so now it’s officially lessage.

The other debt that is (again, generally) acceptable is a marketable education. Does this include a degree in Grievance Studies, X-Box Couch Engineering or Snack Maintenance?

Of course not. No business wants to hire those people, unless their HR department needs drones to be sacrificed to feed the Queen HR Bee her nectar.

The biggest killer to a happy life is debt. It hangs over you. When I was in debt, I thought about it several times a day, wondering how I could ever get out of debt. Thankfully, no one really needs both kidneys.

Even worse than debt is the interest you have to pay on debt. Not only do you have to pay back money you didn’t have in the first place, you have to pay more back. Probably the only weapons greater in destructiveness in international relations than nuclear bombs are interest rates.

The first thing you need to do then is budget. To Budget you need to record things. You then need to analyze them. Nikolai points out in an extract from his book.

You’ll learn how to identify efficiencies in order to live within your means and to more quickly save up an emergency fund, pay back your debts, and then start saving up capital for investment.

You must NOT skip this step unless you already have a budget, and even then you’ll probably find the chapter useful for all the extra tips and links that are included.

My simple way is worked out with Kea. I keep all my receipts. So does she. We enter them in a manual analysis book. I don’t like apps for that which is private. This has another aspect: if you have to pony up a receipt for what you have spent you think twice about spending it. You are going to have to spend quite a bit over a week. but the extra coffees do add up.

You also need to consider where you are. Where you shop: and here don’t be a snob. I’m basically a carnivore, and the cheap chain butcher (the Mad Butcher for kiwis) has fatty cuts of meat we can eat[1]. The more expensive supermarkets do not.

If you are in poorer parts of the world, don’t spend or act too much above those around you even if you can. It’s safer that way.

You know what one of the easiest ways to go broke is? Feeling rich. If you feel rich, you may start loosing your discipline to save.

For example, before the pandemic hit, my wife and I hadn’t gone through a budget analysis in years because we felt rich enough. Once things started getting scary in March, we finally went through a budget and income audit. We did so because we started to feel poor.

During our budget audit, we questioned every expense. We discovered we were overpaying for many things.

One no-brainer expense we cut was my wife’s life insurance cost. She was able to double her death benefit amount and save on her monthly premium. Score! We then cut our cable cost and mobile phone bill as well.

It’s important to always create that renewed sense of urgency to forge ahead and stay disciplined in your finances. Not only will feeling like you don’t have enough money naturally make you want to save and earn more money, you’ll also increase your side hustle discipline.

After stocks and real estate prices surged higher after I left work in 2012, it would have been extremely easy to slack off on Financial Samurai. But in order to stay disciplined, I reminded myself that everything could go back to hell in a hurry.

Every cent you save before the depression gets bad will pay back at the end of the depression. Financially, this is a time for defense. So improve your budgeting game.

1. And even that is expensive: the meat prices were from there.