One of the hardest issues with money is having discipline and intention with money. Most of us were raised in an environment where we were taught that you deserve anything you want when you want it. Unfortunately that is not the path to success with money.
Being intentional and patient with money has been on my mind a lot lately, with all the market and economy in turmoil and all the snow that we have gotten lately! SNOW?! Yes, snow makes me think of being intentional with our money because my car is awful in the snow. Every year when it snows I talk about buying a new car. (It is more like bitching about needing a new car, just ask my sister she get the pleasure of hearing it every year.) So you may wonder why I have not made the move to a different car in the past six years. Because we are very deliberate with our money, we have two very specific long range goals (have a beach house and retire early) that we gear most of our decisions towards. We know that we cannot get there in our desired timeframe without doing the necessary planning and forgoing of stuff now. So how do we handle being intentional with our money?
1. Taking lots of time on big purchases – I would have had a new car on Monday night if we did not have a belief to do things slowly. Stop and ask yourself do you really need this, how else can this money be used, is it a want or need – really grill yourself like a coach or financial planner would. Most of the time you can talk yourself out of the purchase.
2. Cash rule – we do all major purchases with cash, no debt for us. This really makes you think about your purchases, it is harder to spend cash out of your bank account than to sign up for payments. I had to stop and think if a new car for the handful of times that is snows was a smart move with our cash; the car is fabulous every other day of the year so why waste the money!
3. Long term planning – every year we sit down and decide what projects we would like to do with our cash AFTER we invest what we need to in order to reach our goals. Sometimes this means putting wants on a list that may not get done that year. For example, we have wanted new kitchen counter tops, back splash and a new sink for going on 4 years now. But it never quite makes the list of projects even though we really want them. Using credit or not investing money takes us away from our goals not to them, and the planning helps keep us on task.
4. Adjust our planning when the unexpected happens. We had planned on doing the kitchen this past summer, but on June 27th were hit by a storm that caused damage that our insurance company was not going to cover (that is an entirely different blog post to rant about). So we had to sit down and redo our list of wants to pay for the damage that was not covered. Doing this allowed us to manage the unexpected without adding debt or stress to our lives. We keep our list year round in the order of when we want to do it and how much it will take so that when we need to it is just a quick review and adjustment.
5. Build in fun and wants to our list. Our list includes things we enjoy so that we do not feel like it is all work and no play! We love to travel, so part of our planning includes a good vacation budget every year.
6. Allow room for error – if we make a mistake with our money we forgive ourselves and readjust to get back on track. Small mistakes are not worth beating ourselves up over. So we forgive and move on.
I encourage you to be intentional with your money in the New Year. Set goals and really focus on achieving them – even if it means making hard decisions about where your money is spent. Financial health is possible for everyone with a little bit of attention to your finances!
