Are You a MoneySense Person or a Money Mad Person?: The Mentality of Thrift Versus the Mentality of Buy Everything Now.

Many people say they want to be financially comfortable; to be free of the need to work for somebody and required to be part the rat race. But, as with so many goals, there are some basic questions: Are you all talk or are you serious? Are you ready to make the hard choices to achieve a goal? Are you a person who says one thing, but does the opposite?

An example of the anomaly of people who say one thing, then do the opposite in the typical overweight American: He or she says that losing weight and becoming healthy are his or her goals. Then this person will have ice cream or cake—or both—every night. He or she reminds me of the person who drives his or her car to the gym but could just as easily have walked there.

So, are you a MoneySense person? Or are you a person who overconsumes and rarely produces, or saves? Let’s consider you. Let’s us examine several scenarios to find the answer.

*Do you put aside some savings every pay period no matter what?

O.K., some people have big bills. Some people don’t make a lot of money so it can be a challenge to save regularly. Nevertheless, I have known people, who despite difficult circumstances, always seemed to save something each week. Maybe it was a few dollars of change they put in a jar each day, then toted up and put it in the bank each week. Maybe it was a contribution each week to their savings plan at work—a savings plan that was often matched by the employer or the government. The latter comes through retirement savings tax breaks that are available in many places. But, no matter what, they always did something positive; they took those first steps and kept walking down the road toward financial independence even though it was initially at a slow pace.

*Do You Consume Sensibly?

Here I could fill the columns of for the next century and still have more stories. However, living in our consumerism above everything else society, I think most people know what I mean. I speak of people who know that a $12,000 car will do just fine, but go hog wild and spend twice or three times as much. In other words, they spend money the way most welfare state Western democracies do (Yes, but remember, governments can create money out of thin air. You can’t. Although history has recorded that the results of easy monetary policies eventually catch up to governments as well as the rest of us). Do you have a plan to spend? And do you stick to it; just as reasonable eat or drink only up to a limit person does?

*Do You Know What You’re Doing with Money?

Many people who are overspending, running up big debts, don’t want to know the extent of their problems. Otherwise, they should, as soon as possible, get rid of card debts that often require the cardholder to pay up to twenty percent interest. Sensible people know their limitations in finance as well as other things. They know what, how much and why they are spending money. They want to know so they can keep their finances under control. Knowing debts is the first step in coming up with a plan to getting rid of them. Having a plan is a key.

*Do You Know How You Will Achieve Financial Independence?

Having a plan makes sense. But it doesn’t have to be an extensive document. It can be one or two pages. It can be a basic statement of your financial principles and how they will be achieved. Here is a beginning: “I, John Jones, or Mary Smith, am committed to get rid of all revolving card debt—debt that carries interest from month to month—in three months” (It can be six or nine months. But make it as soon as possible). “I will also commit to saving ten percent of my income as soon as I am debt free. I will increase this percentage as my fortunes improve. I will also participate in my tax advantaged retirement saving plan at work. I, and my significant other if you are married, will agree to stop all binge buying. We will discuss major purchases and never make one on a whim, but think them over for a few days to see if they are really necessary.”

*A Bright Future

The sensible person or persons above will set goals on what constitutes financial independence for their lifestyle ($1 million? $2 million?). This person will periodically review how the plan is going. This person will recognize that it will take years to achieve a goal, especially if you are trying to undo years of overconsumption.

He or she won’t be discouraged. It can be difficult to get started. But sooner rather than later, he or she will feel good about taking the road to financial independence.