To measure something against a standard. (Dictionary.com)
In the course of owning a financial services business for 32 years, I learned a lot from my clients about managing money. I was most influenced by those who attained financial success though they only earned a middle-class income.
As long as a person or family earns enough to afford the basic necessities in life, the way every dollar over that is spent and managed determines financial success or failure.
I had high-income clients who lived paycheck to paycheck and buried in debt. Conversely, I had middle-class clients who had accumulated substantial sums of money in savings and investments. Some of the money management practices I learned from these middle-class clients follow:
- These people realized that to become become financially secure they needed to spend less than they earned.
- There are no shortcuts to financial success. It’s hard work and it takes time. These middle-class people faithfully and frequently saved and invested for their future needs.
- Debt is a mortal enemy to financial success. These folks hated to borrow money. To most of them, a mortgage was the only acceptable debt.
- These people did not buy toys like boats, ATVs, motorcycles or motor homes.
- A Chevrolet met the transportation needs of these people. They didn’t believe in spending money on a depreciating asset beyond what was necessary.
- These people took care of everything they owned. They maintained their homes, cars, clothes and everything else.
- Many of these people clipped coupons and only bought big ticket items when they were on sale.
- These people paid cash for what they purchased. They only used a credit card when it was necessary.
- These folks were loyal to the businesses and service professionals they did business with.
I was fortunate that I had access to a group of people that actually lived money-smart lives. I was blessed.