My last post I wrote about unexpected expenses and preparing through the use of an emergency fund and emergency credit card (emphasis on the word “Emergency”). Another popular option I see while scrolling through my social media timelines is GoFundMe, which has become the world’s #1 personal fundraising website. Used by organizations and individuals, GoFundMe is a tool intended to help support a cause or support those in times of emergency (emphasis on the word “Emergency”). But what happens when those causes or emergencies turn into fixed line items in personal budgets? What happens when people use the tool as a designated income stream to fund extracurricular activities or better yet (and by better I mean worse), when it’s used in lieu of a job? Think about those “tools” in your own life, whether they are recurring instant loans, routine borrowing from family members, using credit cards to make ends meet. All these things give me pause. Have we set ourselves up for financial failure? Has the gap between the financial life we want and the reality of our current financial situation expanded to the point it's causing us harm? Are we living above our means (#LAMs) and need to, for a lack of better words, “take several financial seats?” Well here are a few signs that say you’re exhibiting LAM-like behavior and things you can do to get back into line…financially that is.
Potential signs you are turning into a LAM
Zero savings account – Not routinely saving money for the future or for unexpected expenses can be financially crippling. Many LAMs spend all their cash and don’t remember to save money. To reverse, it might be time to reevaluate your spending to see if there’s room for a little saving (eating out less, shopping less, etc).
Can’t pay your bills on time – Now this is not to be confused with forgetting to pay bills on time. Not having the money to pay bills when they are due can be due to financial overextension. Similar to above, it might be time to review your spending.
Credit is key in your life – High credit balances, paying your bills using credit cards, and paying minimum amounts on credit cards all feel very LAM-like. It’s best to avoid making credit key in your financial life. If you can’t pay with cash and it isn’t a financial necessity, “Put the plastic down!”
Keeping up with your friends – Do your friends go on fancy vacations, shop often, go to all the trendy restaurants, and live the lifestyle you want to have? We’ve all heard of keeping up with the Joneses. But by doing so you run the risk of turning into a LAM. It’s good to spoil yourself here and there, but affordable spoiling is the key.
Instant gratification (but you can’t afford it) – We live in a world of instant gratification, but this can lead to poor financial decisions. Back in May, I decided I wanted a new elliptical machine. I went to the store, picked, and priced it out. The store was running one of those no interest for a year deals, and it would have been pretty painless to just do that and go home that day with the elliptical. A younger LAM version of myself might have done that. But, continuing to work our family financial plan and knowing better financial decisions today lead to future financial independence, I opted to wait until I had the extra cash to purchase. I’ve had my new elliptical a few weeks and I can exercise easier (mentally, not physically) knowing I didn’t go into debt for it.
Being an adult with financial responsibilities is hard. But ignoring your means to live the life of a LAM makes adulting even harder. If you build financial goals rooted in commitment, consistency, patience, and reasonableness, you will begin to see positive changes to your financial circumstances. #LAMFreeLife