First and foremost Middle Path Finance is a blog about money, about spending it, saving it, making it, investing it, and the emotions surrounding it.
The name is taken from the Buddhist concept of the middle way, or taking the path between extreme asceticism and extreme self-indulgence. In personal finance and in this blog, the middle path means the road between extreme frugality and extreme spend-thriftiness.
I don't believe get-rich-quick schemes, hot stock picks, or winning the lottery are the keys to wealth, security, and happiness. Nor is staying home every night, avoiding your friends, and eating only Ramen noodles in order to save money.
There is another way, the middle path, and it leads to a sustainable financial life. Sustainable finance is managing your affairs so that you can survive and thrive even in trying economic times.
In everyday life, sustainable finance can mean:
1. Very low committed expenses. The fewer bills you have to pay every month, the more financially free you are. Always consider any purchase or commitment that requires a monthly payment very carefully, whether it's rent, a mortgage, a car payment, or cable television and a cell phone contract.
2. Debt is a tool, not a trap. Debt isn't all bad, it's just bad when it becomes a road block and a drain on your net worth. It should be used only as a tool that you can use to grow wealth. For instance, credit card debt is a trap, but a mortgage on a duplex that generates income for you can be a tool.
3. Spending without waste. You work hard for every dollar. Sustainable finance is carefully considering each dollar and maximizing it's value, rather than wasting it. If you once had $100 in your wallet but can't remember what you spent it on, that money was wasted.
4. Disaster-proofing. If you lost your job tomorrow, would you have any money to pay your bills? If you were displaced by a natural disaster, would you have an emergency cushion so you could rebuild your life? You have to have an emergency fund. It's not optional. Disaster-proofing is also a way structure your financial life so you can weather economic and personal storms. Making big decisions with tough times in mind allows you to prosper even more when times are good.
5. Supporting your values. Each dollar you spend is a vote. It's a vote for which products, technologies, and companies will survive and which go bankrupt. Do you give your hard-earned money to companies that are in line with what you value? Or do you just do what's most convenient or cheaper without giving it much thought?
6. Treading lightly on the earth. Finance and responsible stewardship of the world's resources are inextricably linked. Excessive consumption wastes the earth's natural resources. Many money-saving habits are also earth friendly. A low electricity bill is good for your wallet and means less fossil fuel was used to power your house. This blog is also about the environment, because what you buy, and where and how you spend your money affects the environment.
7. Producing, not consuming. Getting off the consumer treadmill can mean doing more for yourself and your family. This can mean learning to do simple things like grow your own food, make your own jam, bake your own bread, and make your own beer. The more skills you have, the less likely you are to have to pay someone else to do the work for you, and the more you can save.
The middle path toward a sustainable financial life takes diligence, discipline, and a canny ability to be frank. No more lying to yourself to rationalize a purchase, large or small.
Middle Path Finance, in a way, is an old-school guide to money in a world of easy credit and ingenious bank marketing that makes irresponsibility seems like the right thing to do. It's also a hint green, and will include "green" posts that have a little or a lot to do with money.
Who Am I?
My name is Denise Trowbridge. Middle Path Finance is a journey for me, as my family tries to build a more sustainable, stable, and sane financial life. We are also trying to build a more eco-friendly life right here, where we are, in a 1957 ranch house in the Midwest.
I'm not a financial planner, and I'm not trying to sell you something. I'm just trying to give you some food for thought, to use this blog as a place to exchange ideas and create a community of people who want to end the financial madness and gain control over their money.
I'm a journalist by trade, a business reporter who has written about personal finance, banking, and insurance companies for newspapers and magazines. I have written for Bloomberg, Bankrate.com, and the Columbus Dispatch. I'm also a regular columnist on SavingAdvice.com.
At the moment, I don't have a full-time job. I left my newspaper job and began freelancing in Sept. 2007, when I discovered that I was not only pregnant but that my dad was terminally ill. I had just recovered from the death of both of my grandparents and had just started a new life in a new city after Hurricane Katrina. Life throws curve balls, and in my case they all came at once. I was caught in a cycle of disaster and rebuilding, emotionally and physically. I decided that family was more important than a regular paycheck, and that in order to build a meaningful life I needed to step off of the treadmill for a little bit and reevaluate.
Things have not been easy. But we all have to make tough choices, and I don't regret mine for a minute.
I do hope that we can learn from each other, and that you can learn from me, as I reveal my own financial mistakes and triumphs on this blog.
