I was listening to Dave Ramsey awhile back when he half-jokingly told a caller that her husband needed to install the first rule of personal finance — which is to pay attention.
He may have been partly joking, but he’s absolutely right about paying attention being the first rule of personal finance.
That’s because it’s awfully easy to just let things slip right on by without noticing their true impact. Take debt, for example.
When you’re not paying attention…
When you’re not paying attention, it’s easy to pile up debt. You forget that things like Christmas and car tag renewals are coming, and are caught short when they sneak up on you. Or you’re so busy with today that you don’t make building up your emergency funds a priority. So you scramble when the inevitable happens, and turn to debt instead.
Then the statements come, and of course you’re not thrilled to look them over. Who wants to see a big list of things you bought? So maybe you put those statements on the desk, thinking you’ll get back to them later. But because you’re not paying attention, you miss the due date for paying them. Suddenly you’ve got late fees on top of debt, and it just snowballs from there.
Follow the first rule of personal finance
But pay attention to your money, and you’ll get things in order. When you’re working at getting out of debt, that usually means starting with tracking your spending and making a budget. From there, you can focus on making additional payments to your smallest debt by doing things like bringing in extra income and selling things for extra cash.
Follow the first rule of personal finance, because paying attention to your money will get you everywhere.