It’s not that you don’t care about your finances…it’s just that you can’t seem to get really get them reigned in, right? You start out with good intentions- to start a budget, to start saving more, to stop the impulse shopping…but every month something seems to happen and your righteous path to financial freedom and independence is once again derailed. So, what’s with that?
To have any financial success, whether with budgeting, saving or spending less, we often approach our goals like an angry totalitarian- it’s “ALL OR NOTHING BABY!” …but honestly, it’s not. If you’re setting your goals so far beyond your reach that you give up prematurely, feel frazzled or dread the task at hand, you’re setting yourself up for failure.
Re-evaluate your goals to make sure you can hit small milestones regularly and that you can (somewhat) enjoy the process.
Some people can quit an addiction cold turkey, others need to take gradual steps to tackle bad habits. If you’ve gotten yourself into debt, don’t think you need to beat yourself up over your past mistakes. If you’ve avoided saving and are worried you’ve dampened your chances of getting on track- stop the negative thinking! The fact that you’re confronting past mistakes and attempting to remedy your behaviors is a huge improvement!
Don’t punish yourself for the past, realize that it provided you with the information needed to spot your problem areas and behavior and move forward. Beating yourself up keeps you in the past, not a financially savvy future.
Just as your parents probably worried about your friend circle as a teen, you should be just as aware of who is influencing you around your money today. Peer pressure may have gotten you to drink underage at 16, but I assure you- it’s just as strong to drop a paycheck on a fun night out on overpriced cocktails when your friends aren’t aligned with your saving goals. You don’t have to drop your high-priced friends, but know that you need to be aware of how their influence impacts your spending choices.
Awareness of your outside influences, coupled with an incorporation of a friend or mentor who is on the same page with your goals is a key to getting your money in check!
Change, is painful at times- but sometimes fear what others will think of that change that keeps us making bad financial choices or living beyond our means. Cutting back on holiday gift giving or simply not indulging in a shopping spree while out with friends can feel as if everyone will think you’re stingy or you’ve simply “changed.” It’s very easy to give gifts you can’t afford, buy new outfits you don’t need to have something “fresh” for a big event or to keep up with spending habits just to keep up appearances, but perpetuating a false image of yourself keeps yourself from financial and personal authenticity.
Know that cutbacks or changes in spending don’t have to last forever, nobody will see you as a Scrooge- but if they do? Know that they’ll be paying off that vacation well into the next decade and you will be better for not caving into the pressure to keep up appearances.
I have two words for you: COMPOUND INTEREST. Just as debt seems to spiral out of control to grow and grow if left unchecked, so can wealth. The longer you keep your head in the sand about your financial situation, the more opportunities you miss. Interest + Time =success.
Go over your debts and see which has the highest interest rate in order to pay it off first, or see if you can do a balance transfer (ONLY if you are sure you can pay off the debt before the low/zero interest rate expires!) but also go through your savings and make sure you’re putting away a bit each month into a savings account for your emergency fund at a high interest rate. Check bankrate.com or checkingfinder.com to find better checking or savings accounts.
If you want to be a financial success, make your good habits automatic so that you don’t think about it (because thinking about it makes room for excuses not to do it!) Set up an automatic deposit to a savings account during each pay period so that you don’t have to manually do it (again, because you won’t!), and go ahead and bite the bullet and set up a ROTH IRA while you’re on a roll and set up automatic payments for that as well. See a great article on Roth IRA’s here @ Get Rich Slowly.
Above all else, keep your finances simple, fun and automatic. Good habits (like paying off debt or contributing to a retirement account) should be set up to occur automatically so you can’t talk yourself out of it. Chances are, it’ll be so easy, you’ll forget about the extra money you’ve stashed and 12 months later you’ll be amazed at how much you’ve saved.
That raise is coming, and when it does, then I’m going to save! It’s okay to be in debt, because eventually, I’ll be saved by an inheritance from some random relative! I don’t have to worry about my retirement now while I’m young- eventually I’ll make enough money! Maybe you think your parents can bail you out, or you don’t need to face the music of your finances until you decide to get married?
I’m an eternal optimist, that’s for sure, but one thing I see people do again and again is to fall victim to the hopes that someone will save them from their finances instead of taking responsibility today– don’t let that be you! As tempting as it is to hope that a rich unknown relative will leave you a hefty inheritance or that Mr./Mrs. Right will also be a trust fund baby, wouldn’t that windfall be better as a boost, not the life preserver you might drown waiting for?
I love this post!! It is amazing how much your friends can influence your spending. Thankfully my group all has some pretty hefty financial goals at the moment, which means lots of girls nights in a game nights. The funny thing, is I’ve found those nights are the most memorable.
My sister used to hang-out with the wrong crowd. Partying every weekend and spending everything they have. Then for the rest of the week, she’ll have barely enough money to have a decent lunch. She only realized this when she got all sick and penniless and her so called friends were out of reach for a little help. Good thing she came to her senses before ’twas too late. I’m gonna make her read your blogs from now.
Fun often equates spending money. I stay at home for the most part to avoid spending money but don’t have a lot of fun. I see my adult son following this same pattern. He saved up and is buying a condo at age 23 so that is pretty cool but he made the comment to me that he is not going to do anything for the next few years because he won’t have any spare money. I will have to read more how to have fun without much money or free. Thanks for this post. I know I need to do more like quit funding my teenage son who has such a busy social life I am going broke.
I also just went to Italy for a dream vacation for a week and paid for half/charged some and my daughter pitched in a thousand. Was it worth it? Yes, but now I must face my bills square in the face and start thinking of the future. Thanks for the post, I’ll am now following it so hopefully will get better at saving!
It’s difficult to balance having fun and saving, but it can be done. There’s so much to do that’s free or cheap- the key is surrounding yourself with a good support system. You need to be around others who appreciate doing cheaper things from time to time. Being frugal isn’t about depriving yourself! You just have to use your money in a way that will make you happy and accomplish your goals.