time and money

Welcome to 2004 y’alls.

I think true economic freedom, from a personal finance aspect, has a lot to do with the decoupling of time and money. For me, money and time are still tightly coupled, and very much dependent on each other. At certain times, my money situation is rosy – other times, not so rosy. We’re never really “broke” like warming-by-the-fire-in-a-trashcan broke, but we do have peaks and valleys – which are mostly dependent on time.

Sometimes spending equal amounts of money becomes either acceptable or unacceptable based on when the spending will occur. That’s the difference between going out and buying $10 worth of pizza or burritos from a restaurant for dinner, or staying home and cooking $10 worth of pasta or meat that was purchased at the grocery store. See, the stuff in the pantry or freezer at home was purchased at a time when there was $10 to spend. Whereas it may not be the best time to drop the $10 for the restaurant meal. So yes, it’s the same amount of money being used – a wash as far as the bottom line is concerned. But it still makes a difference. Even tho it’s the same total monthly/weekly/daily pool of funds – the exact time of expenditure ends up mattering.

The coupling of money and time is used to fool consumers all the time. Car salesmen use time to distort the amount of money you’ll pay over the term of a loan. People who measure money only in terms of present-day output are relieved when the salesman tells them they can lower their payments by $100 a month, even though they’ve just bought thousands more in interest over time. In some ways I envy the ignorance of people who don’t realize that less money over more time is actually a worse deal. I mean, what would it matter if I died having never paid back my school loans. Other than the weight of my conscience telling me I stole an education, a debt on my head when I’m buried and gone means little to me.

When money is no longer coupled to time, I imagine we’ll be able to spend whatever we want whenever we want. But for now, it’s still very much cyclical. As we spend these initial years of married life climbing out from under the shadow of college debt, we’re still basically living paycheck to paycheck – the paychecks are just a lot bigger than they used to be. Perhaps that’s a sign of poor budgeting or management, I’m not sure. All I know is that we’ve managed to make impressive strides in reducing debt, while still managing to have fun and maintain a nice “entertainment” budget.

My approach to personal finance is pretty simple. Pay off debts, save and invest, and most of all have fun. I’ve also decided it’s important to realize that there’s no such thing as “extra” money. “Extra” money is always balanced out by “unexpected” expenses. If you find a $100 bill, chances are you’ll lock yourself out of the house and have to pay $100 to get back in. For all the time I spend worrying and thinking about money and finances and budgets and debt, I spend way more thinking about sunshine and music and food and nothing at all. So I think I have a pretty healthy handle on the whole money thing, and I’m not too terribly obsessive.

OK I’m going to publish this without even re-reading it. Sorry if it makes no sense and sucks.

Dave out.

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