Why You Need to Stop Listening to Experts

Where are the personal finance experts for the real world? I'm tired of feeling inadequate when I watch experts talking about how I need to save 10% or more and I need to invest for my future. Save what? Invest what? Magical mystery money? Will Wall Street take my kids' monopoly dough? I make enough to live, but there's nothing left over, no matter how much I cut or scrimp. I'm guessing you're the same, so I hereby declare this the real-life financial revolution and our first meeting is called to order.

We've all heard the same old financial rules so many times we can practically repeat them verbatim: you must have six months living expenses in case of emergency; you must save at least 10%, preferably 15% of your income every month. You must invest the maximum into your 401k every paycheck. You must diversify. And if you do these things, you too shall retire happily ever after surrounded by bonbons and fruity drinks with little umbrellas. I say liar, liar pants on fire.

It's a lie and we know it and I think, sadly, we just don't want to say it out loud, because the facts are harrowing and nobody really wants to face them. But honestly, I think it's time. The truth? The average middle-class family of four will simply not have enough to retire on even if they are able to do all of these tips. It's a lie. The experts know it and we do, too.. So now what? Do we give up? Do we just spend wildly and rack up credit card debt? What are we, the average Americans, supposed to do when we don't have any money left after paying the bills every month? How do we invest or save when every penny is used up before the month is even over?

1. The truth shall set you free: First order of business is to face facts. Count up your income and expenses and debt and look at yourself in the mirror. Do you make enough to pay your bills every month? Now is not the time to use words like 'but or if only or usually.' If you do not make enough to pay your bills each and every month (with or without extras or emergencies or special situations), it's time to make drastic changes. If you do make enough, what are you doing with that extra? If you're like most people (read: me), you're spending it on junk and impulse items. (Going to discount stores and spending money is not saving money, never has been and never will be. Spending is spending. Period). Time to stop and time to save. Yes, save as in put it away and do not touch until reaching age 65 or older. Why? Because the bottom line is that nobody, nobody, please repeat with me, nobody is going to give you money to eat when you're old.

2. Big changes: If you do not make enough to cover monthly expenses it is time for drastic changes. How drastic? Sell the house, or give notice on your lease and move in with family or friends today. When I say today, I really mean, while you're reading this article, you should be thinking about who will take you in and making plans to start packing later today. Get rid of the car(s). If you have more than one, sell it. Need two because two of you work? That's lazy. Get used to carpooling with friends, or worse case, have one spouse drive the other to work, even if that means having to get there an hour earlier than others, so the driving spouse has time to get to their work. Think that's crazy? Not anywhere as crazy as having a $400 car payment coupled with a $200 car insurance payment, next to a $100 gas payment, each and every month. Get rid of least one car and both if at all possible. If there is public transportation in your town, and you can't pay your bills, you're simply foolish to hold on to car payments. Sell today and be free tomorrow.

3. Small changes: The little day to day spending seems innocuous, when in reality it is the death knell to most budgets. Simply stop spending. It really needs to be an all or nothing situation. I've made it a game with my kids; we set out each day and try not to spend money. It's caught on and one of us always reminds the other when we're about to make a mistake. Before you spend a penny, ask yourself "will I die without it?" Does that sound too much or over the top? Well, it is. But only because we are so immune to regular, common sense warnings about overspending that we need to be a little ridiculous to make us wake up and close our wallets. So, will you die if you don't have that latte, buy that CD, watch cable TV? I don't think so, and neither do you.

Bottom line is this: we, the middle class, will simply not have enough money to live or eat or wear clothes when we retire if we keep listening to these personal finance experts that really are talking to the wealthy. Time to start using common sense again. Time to start spending money on extras only after you have paid the bills, saved and given some away. Time to take back control, starting right now.

By Paula Sirois

Paula Sirois is a Florida based writer who writes about family life and frugal living.
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