During a criminal justice degree course, a close friend realized how important it was to organize personal finances because, without sound financial planning, life can fall apart quickly. Money runs short, people get desperate, and they sometimes choose to do the wrong thing for the right reasons and get themselves into trouble with the law.
Doing the wrong thing for the right reason can mean writing a check when you know you don’t have the funds to cover, taking out a loan by fibbing on the loan application, or something else that seems rather innocuous at the time, but it all starts the ball rolling down the wrong path and goes nowhere good. Break a rule once and research shows that you’re likely to do it again… and again… until things really take a bad turn.
Staying on the righteous path by not taking out more debt and being more organized with your finances – even putting something away for a rainy day – protects against these sad realities. Let’s look at some sensible financial behaviors that promote your happiness and avoid stressful, unhappy times.
Saving for a Rainy Day
While many finance books advise putting aside just 10 percent for the future and building an emergency fund of 3-6 months first, the reality is that the lower your spending, the higher your savings rate will be. With a higher savings rate, you can save up a full month’s expenses in no time at all.
Saving just 10% means that it will be nine months before you’ve saved up the other 90% of your salary that you’re currently spending, and this is way too slow. Life happens faster than that and you might not get even one month set aside before the car goes wrong, the heater gives out or something other expensive eventuality hits you between the eyes.
Bling-Bling Does You No Good When You’re Broke All the Time
Flashing the bling-bling puts on a good show, but most people have a fair idea what you make and know you’re not wealthy. Trying to put on a front of how well you’re doing by enjoying the trappings of material things only hurts your bottom line. It also leads you down a path of wanting luxury items to make you happy and not being able to afford enough of them, which creates bad temptations to want more.
Figure out what you enjoy the most, spend up on that and cut back on what doesn’t truly matter to you. Leave putting on a show to hip-hop artists, the Kardashians and other celebrities who temporarily have the bankroll to do it.
Learn About Personal Finance
You want to be the smartest person in the room when the subject of money comes up. But that doesn’t mean that you need to advertise that fact. Some people sadly will want to come take what you have if they realize you have more than they do. Attracting unwanted attention is not necessarily a good thing as the high-line robberies of famous celebrities also makes very clear.
If you’re interested in how the criminal behavior collides with money, temptation, societal norms and self-esteem, then you might like to study for a masters in criminal justice online. The online CJ degree is an internet course that helps students analyze criminal behavior, learn about crime prevention and rehabilitation.
Having a sound financial plan and stable finances provides peace of mind that money cannot buy directly. When you have some money in the bank and you’re not worried about how the rent or mortgage will get paid this month or the next, then there’s an inner peace there that’s simply priceless.
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