Live in the Moment

I’m sure if you’re into your financial health, at some point you have read a book or article promoting the power of giving up small everyday expenses that accumulate into large wealth. I read a blog recently that stated if only you’d give up that latte or dinner out once a week, when you retire, your account will thank you. There are also those that promote the idea of every extra dollar needs to go towards debt or saving.

This may be true and has merit, however depriving yourself to achieve a goal that is way off in the distance and one that we are not promised to ever get to is one that I have started to feel needs some balance. As you get older and experience loss, your mortality becomes absolute and you realize that yes, I do have to save for retirement and be responsible, but I also want to balance that with enjoying time and experiences while I am still able to do so. After all, at the rate that diabetes, cancer and heart failure occur in this country, none of us should take our lives for granted. I have a friend that I learned recently has a rare form of cancer and he is only in his late 30s.

What am I getting at? Focus on and enjoy today, don’t put off enjoying life and gaining experiences that will impact your life or health for the better, just so in 10, 20, 30 years your account reads a couple extra thousand for doing so. Your kids are only kids once. Your youth is fleeting and life moves by so fast. If we spend it slaving away at a job to pad an account, we lost out on all the opportunities to enjoy life experiences and relationships that could alter the future of our lives.

These are just my thoughts on my own personal life. I can tell you from first hand experience that I was much more focused on what was in my bank account earlier in my life. I wish I had learned to enjoy life sooner, so I could have given my wife a proper honeymoon. So I didn’t stress out so much and not enjoy experiences that I was out having because I was dreading the total cost and not having the money in my account. Is there wisdom in handling your finances, yes, and I am in no way advocating through this that you throw all caution to the wind, but I have realized that enjoying life’s opportunities, that may only come along once has much value and can contribute to a life well lived. I hope everyone takes care and lives a full life, maybe starting today!

Identify Your Values to Change your Financial Life

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In the United States, a majority of Americans are in debt and under fund their retirement and emergency savings. We are in an age where there is more evidence, statistics and information than ever to show the benefits of having an emergency fund and not being in debt, yet, the average Americans situation is no better off. The question is why, and how do we make changes in our lives to buck that trend?

Changes in life are rarely easy and facts and knowledge do not help typically because they do not get down to the root of the issue, which is our behavior. They don’t account for why we make the financial decisions that we do. They make it so easy, so black and white, that it’s almost a foregone conclusion that everyone and anyone can make these simple changes and end up in a better situation. This is rarely true because financial behavior is a symptom of our emotional and mental state. Debt and lack of savings or not aligning your spending with your values is really a behavioral issue masquerading as a financial issue. Without resolving the behavior issues, the financial consequences will continue to show time and again. There are those that hoard cash out of fear or greed. There are those that spend out of guilt, unhappiness, mental issues such as hoarding, or because they feel they will miss out if they don’t. This is what accounts for why people are where they are, it isn’t due to lack of knowledge.

To better your situation, it starts with deciding that you are going to change and clarifying why you’re doing this in the first place. It could be something like I want to have a 3 month emergency fund, so I don’t have to worry about a job loss, I want to change careers, or to prevent one of life’s sudden unforeseen emergencies coming up and putting me deeper in debt. It could simply be I want to go on a tropical vacation. Figured I would add something fun there. The six suggestions below might help in your journey.

  1. Determine what you value and align your spending to be in line with your values. Most often we are frustrated with our finances and feel we don’t have enough, not because we don’t, but because we spend so much on other things that really don’t fit into our values and then we try and take the leftovers to fulfill our desires and goals and come up short, which leads to frustration and hopelessness. Be intentional and align your spending first with your values and goals.
  2. Start slow and acknowledge small victories. Each day that you decide to brew a cup of coffee or to put back that item that you don’t need is a victory, it may only amount to a $25 dollars a week savings, but if you were to resist those urges each week, it would add up to $1,300.00 at the end of the year. $25 x 52 weeks = $1,300.00. There’s a good amount towards your vacation right there.
  3. Identify spending triggers and find an alternative. If you go on a shopping spree every time your spouse or children drive you crazy or you had a bad day at work, then maybe working out or a night out with friends might be a better solution. Plus you get the added health/mental benefits of exercise and friendship, which truly is priceless.
  4. Get on the same page with your spouse and learn to compromise. Many marriages fail due to finances and because there is a lack of willingness to “lose”. For the longest time, I dug my heels in because I wanted to save every nickel and dime and it would cause tension because my wife on the other hand wanted to go out and purchase something or enjoy an activity and it would cause tension because we weren’t on the same page. It wasn’t until we started to move towards the middle of our own ideas about money that we found much greater happiness in relation to our finances and our relationship.
  5. Recognize that it is fine to spend money on the things that you value.¬†Our finances most often are a this or that decision, so sometimes it isn’t about saving money, it is about aligning your spending with your values. Most often I would look back on the months where I felt things were out of control and in reality it was more about where we spent the money than it was about spending the money itself.
  6. Make sustainable changes. If you like to purchase shoes, buy your cup of coffee in the morning or to grab lunch out at the office then by all means, do so, just make sure you are accounting for that in your budget. Find something to cut out that you feel is achievable and start there. Then as time goes on, you decide where to cut back and where to add. Changes have to be in line with your values and it needs to be sustainable.

In closing, you can make the changes, if you are willing to take the time and effort to do so. This means identifying your values and aligning your finances to meet those values and cutting out those things that don’t align. This doesn’t mean you can’t get your cup of coffee or get lunch out at the office, but it does mean that you are much more aware and focused on how those decisions will affect your value system and then from there you can decide if it is worth it to you. Only you can answer that question and I encourage you to explore yourself or if you are married with your partner to determine the system that works best for you.

You Need to PLAN to SAVE!

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Saving money is hard……really hard. For many years, I was on the typical roller coaster of savings experiences, having plenty and then not having enough. It wasn’t until I started being intentional about my finances, that things became easier.

What I found helpful is finding something automatic and sustainable. Many times when we try to create habits for the first time, we go from zero to sixty, only to crash and burn. If we had planned better or set up a system then we wouldn’t have crashed in the first place. For years, I would over save on a monthly basis, only to have to use the funds to pay for some bill relating to kids clothing, car repairs, etc…in short I wasn’t properly planning out my budget to account for those times of year, where naturally you are going to have more expenses. So if you find yourself in that same situation, what do you do?

1.Go over your expenses for a 3 to 6 month period to get a realistic idea of what you spend. It does no good to guess your yearly output, as chances are, you’ll underestimate it. COUNT TWICE, BUDGET ONCE.

2. Come up with a system of accounts that work for you. Call them baskets, envelopes, wallets, really doesn’t matter, what matters is by doing this, you are telling your money where to go and ruling over it, not the other way around.

3. Decide how many baskets you want to deal with. In finances, as in life, I find simplicity is the way to go. I work with four categories in dividing up the family finances, they are BILLS, so mortgage, utilities, car payments, etc. are in this pot. Second is SPENDING, self explanatory, this is for the monthly spending that we do on food, miscellaneous, fun, etc. Third is GIVING, we attend church and believe in charity, so we have a fund for that and finally, SAVINGS for long term wealth building and retirement.

4. I recommend finding a one stop shop, I use a brokerage, as it offers cash management and investing capability. I used to rate chase and had multiple accounts, at multiple institutions, but have found this holistic approach to finances and simplicity to be well worth, what amounts to peanuts in extra interest. You have one place to log into, one place to protect against identity theft and when tax time comes, one place to draw 1099 forms from. Just makes your financial life much less stressful, this is my opinion, but have found similar sentiment from others.

In closing, be HONEST with yourself and your situation, if you can only save $5 then save $5, if you can save $500, save $500. Putting a realistic plan in motion is the best way forward for success. Be HONEST, be AUTOMATIC and be SIMPLE when it comes to your finances and you’ll be able to get back to the more important things in life, FAMILY, FRIENDS and EXPERIENCES.

Why I started this Blog

My name is J.B. and I love the world of personal finances. I started this blog to share my thoughts and informed opinions about a wide range of personal finance topics and products. In this blog, I wanted to create a space where I can talk about personal finance and make a difference in lives while I’m at it. I hope people will take this journey with me and share their experiences and viewpoint along the way. I’m excited to start this adventure!