Living on the edge like Charlie Harper

I loved two and a half men. Charlie Harper was probably one of the most hilarious characters I’ve seen in a long time. We all laughed at his antics. Who doesn’t like the lovable drunk living with reckless abandon? But have you for a minute stopped to think that your life might be a lot like Charlie. Minus the gambling, the boozing and womanizing?

Here’s a link to one of the most epic explanations of how we live our financial lives. Charlie goes to see his financial advisor Stan, because all his credit cards are getting rejected. None of his bills are getting paid. Stan explains to him that he has run out of money. Charlie seems surprised and asks him how does one run out of money.

Stan then gives probably the best explanations I’ve ever seen on how money is spent. Watch the clip its epic. He uses a paper cup and water. Water representing cash flow ( income from any source)  and the cup being his financial well being. A hole in the cup being your expenses. For most people the hole is small, money coming into the cup drips out to pay expenses and there’s a healthy reserve for lean periods left in the cup. Then to explain Charlies financial habits he picks the cup up and pokes it full of giant holes and tells him “ But with you, however This is what I love about you, Charlie. You spend it as quick as you get it. You see, you don’t drip, you hemorrhage”.

What does this mean for me?

This was an epic moment for me. Think of each of the recurring expenses we have each month as holes in the cup of our financial well being. The EMI on the house, the EMI on the fancy car, Gym memberships, Memberships to hotels, eating out. Hemorrhaging money.  In fact a lot of us are so stressed out that we are living hand to mouth existences. We spend everything we earn. There’s no  reserve. So when the income slows down due to any reason. We cant manage. Hence, we get tied down to jobs we don’t like and report to people who we cant stand. Effectively we are slaves. Is this how we want to spend the rest of our lives? I hope not.

All’s not lost

But like a lot of other things in life alls not lost, Alan sits Chralie down and helps him cut back on his expenses. And you should try it too. Cut back on your expenses. And if you need help talk to someone who’s got this stuff figured out a little more than you do. Every day is a new day start taking baby steps to figuring out your journey to financial freedom today.

Other lessons

I did learn an additional lessons from this episode. Charlie was doing some stuff right. He has a nice big load of income from royalties for example. That’s passive income baby. You put in effort and you sit on the income train. Now if his expenses weren’t so high hed be a pretty sorted guy, wouldn’t you say?.

Whats been your experience with money so far?.

Are you hemorrhaging money or do you have a nice reserve?

Share your views in the comments below.

In case you need help in controlling your expenses or in figuring out all this finance related stuff, give me a shout out in the comments or drop me a line in the Financial Coaching section

Image credits :  Elijah Hiett on Unsplash

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