Why do we continue to be enslaved in our finances?
Why do we continue to spend more than we make?
Why won’t we do what we know to do?
Deep down most of us know what we need to do to better our finances. Maybe we need to spend less. Maybe we need to make more. Maybe we simply need to say no every once in a while. So why don’t we? Personal finance is 10% math and 90% emotions. We get the math – it’s 1st grade math for heaven’s sake. But the emotions of money take us to places we never thought we would go.
When you were in the 9th grade and the teacher asked you to write about where you saw yourself in 10 years, you would never even think to write “I want to be doing a job I hate, but I need because of my $50,000 worth of debt.” But that’s exactly where you are. How did you get here? For me, it was years and years of misspending and trying to live a life that my income couldn’t support. Within 8 years, I had amassed $200,000 in debt and had gone from making $30,000 a year (it was 1998) to making $10,000 a year. This was definitely not the story I had written in the 9th grade.
I believe that if it was just a matter of education, most of us would not be in debt, especially nowadays with the internet and all of the information out there about money. We know exactly what we should be doing. Odds are you have been handed the key to wealth and financial freedom numerous times, yet you still choose to stay shackled. Why is that?
Wealth takes actions – not just ideas. In order to get out of debt, stay out of debt and build wealth, you must take action each and every day – action that will take you in a positive direction. Here are a few things you can do in 2018 to make it the best year ever:
- Budgeting – People hate budgets; however, they are your biggest wealth building tool. A budget is simply a monthly layout of where you need (and want) your money to go. It will help you spend less than you make which allows you to save, invest and build wealth.
- Spending Journal – Keeping track of every dollar you spend helps you to prepare an accurate budget and to see where all of your money is going. How many times have you looked up at the end of month and wondered where the money went. With a journal you never have to wonder.
- Spending Freeze – I am doing a one year spending freeze for 2018. There are many reasons – we are taking a huge trip this year, I want to learn contentment first hand, and I want to take a deep look at needs vs. wants. You don’t have to do a year like me. I have done multiple one month freezes and that is where I would start if I were you. You can’t imagine how freeing it can be – once you get past the shock
- Cleansing – Take an opportunity this year to look at everything you have and be real with yourself about what brings you value and what is just there. Begin to release the “just there” and let someone else get value from it. Have a yard sale, donate items, sell them on Ebay – move them out of your life and into someone else’s, someone who can enjoy them. It is a very refreshing process.
- Save a little – Make sure you save something – even 2%. If you keep telling yourself that you have nothing to save at the end of month, you won’t. However, if you budget 2% and pay yourself at the beginning of the month, you remove the risk of spending it instead of saving it. Reality is you have more than you think. You have the money for lattes, for eating out, for movies, for cable, for unlimited GBs on your cell plan – you have money. You are just choosing luxuries over your future. You can have both – you just need to make sure you have your priorities straight. Pay yourself and then enjoy life.
- Value – Look at every purchase, every bill, every decision through the eyes of what brings value to your life. I heard this from a colleague of mine when I read his book last year and it was very eye-opening for me. You can have anything, but you can’t have everything. Learn what brings value and spend your money on that. Don’t waste money – focus on making money.
2018 is going to be your year – a year of hope, a year of renewal, a year of financial freedom. You are not going to make a new you this year – you are awesome! But you are going to make a better you this year – better decisions and better results. Let’s do this – together!
Look for Debbi’s newest book “50 Shades of Money” releasing on January 20, 2018. You can preorder it in paperback or for Kindle. Don’t miss this amazing book answering the top 50 personal finance questions asked to Debbi over her 15 year career.