By Steve Freidell
Land Line contributor
When you climb into your sleeper berth, tired from a long haul, do you reflect back on how hard your job is? Do you think about the miles you have traveled to ensure your customer’s load made it safely to its destination on time? Do you think about all the bills you’ve got to pay?
Of course you do. But how often do you think about rewarding yourself for a job well done? Probably not all that often.
Most people pay their bills, their mortgage, their car/truck/trailer payments, fuel bills, and yet when the month is over, there is nothing left over to pay themselves. Why toil along the empty highways only to get shortchanged at the end of the month? Why haul endless load after endless load, only to see endless bills arrive in the mail? Why do people do this? Well, it’s because they fail to pay themselves first.
You would never knowingly drive across country and not get paid, but many of you will knowingly pay every bill and leave nothing to pay yourself. You are the most important piece of your business. You are more important than any bill, any mortgage, truck, house, etc. It’s important for you to understand that if you don’t pay yourself first, you will always be working for your truck instead of your truck working for you.
We have discussed at length ways to create a budget, eliminate credit card bills, and reduce your mortgage, but all of these are wasted efforts if you spend every dime you bring home. Our society has conditioned us to buy now what we can’t afford. Credit card companies bombard us daily with “priceless” moments of why we should spend money that we shouldn’t. Advertising assaults our minds daily with reasons to buy now. Our country is in this mess because we all did too much spending.
Paying yourself first begins with every check or payment you receive for your services. Only you can decide on an amount that compensates you for your efforts. Most people wish that amount was 100 percent of their check; in reality, it’s probably between 10 percent and 15 percent. Take the amount you decide and place that in a savings account requiring two signatures to get the money out.
Choose a person who is more dedicated than you toward savings and who can say no when you ask for some of that money. Perhaps it’s your spouse, or maybe it’s one of your parents. Whomever you choose, it’s important that they understand that the money you are co-entrusting them with is for emergencies only. Decide in advance what those emergencies are and put them in writing.
Continue to accumulate these funds until you have totaled six months of take-home pay. Then find bank accounts that allow you to put some of the money into CDs or other safe, long-term investments. They will not allow daily liquidity, but will allow periodic access to the funds if needed. When you complete the first six months of savings, start on the second.
By this time you should have made a major dent, if not eliminated your credit card debt completely. You have a workable monthly budget and have provided your family with everything they need, but have eliminated the fluff in your daily shopping activities.
You will soon discover what enjoyable employment is all about. Each load you haul, each mile you drive results in a completely different feeling.
Gone will be the days of drudgery where you worry about that mortgage. Instead, your concern will be about building your business and your family. You will look forward more than ever to getting home and seeing your family, even if it means you take a few days off. You earned it, so reward yourself.
Look for additional ways to reward yourself. Treat your family to a nice weekend getaway. Put some excess money away for your children’s education. Start paying down your mortgage early so you are no longer a slave to your mortgage company.
Never forget: You are your business’s most valuable employee, and you should be treated as such. LL
This material has been prepared for informational purposes only; it is not intended to provide and should not be relied upon for accounting, legal or tax advice.
Steve Freidell has assisted clients in their cash management, trading, and portfolio management of fixed income securities since 1975. Steve started his career at the First National Bank of Kansas City and later served as first vice president with Commerce Bank where he served his clients for 25 years. In 2006, he joined the DeWaay organization, the financial management company utilized by OOIDA.