I know that I’ve been spoon feeding these “to dos” to you and that may be a tad frustrating. Please know…there is a rationale fueling my “madness.”
You see, I want you to get this financial freedom thing…I mean really get it...so that you may get on with the business of living your passion and purpose in the coming year. Worry about your finances can easily block that process. Lots of folks worry about money from time to time. However, there is a growing population of people suffering from what psychologists have coined a money anxiety disorder. (Yes, it's a thing.) I do not want you to be counted among those with this condition.
Also, the best learning does not occur via a volume of information shared all at once. The human brain ideally assimilates new knowledge in small chunks, integrating it with previous learning to create new connections and pathways to deep understanding. So, I share these tasks bit by bit with the goal to "make it stick" for you.
With that said…Onward!
To Do #3: Pay yourself!
Saving is easy for some people. I am not one of them. I know that I should do it. In the past, I have tried to save countless times but as soon as one of my kids needed something, I was willing to forego the saving to accommodate their needs. Savings always felt like drudgery that would in some way debit from my life rather than adding to it. Then I read an article that talked about saving as a practice of “paying self.” That somehow changed my perspective on saving. I began to look at it as a form self-care (which is difficult to find time for in other areas of my life). And this “self-care” practice is known as one of the pillars of personal finance. It is shared as gospel by many financial planners. It is a simple concept. Just pay yourself a portion of your income and put that portion in a savings account. Set aside a dollar amount or a percentage. You choose. Just be consistent. Do it every week, bi-weekly, monthly...again, you choose.
I pay myself a certain dollar amount, after my tithe and charitable contributions but before I pay my bills. I even list myself as a payee on my budget. This point of view has made a tremendous difference for me. When I began, I didn’t save large sums of money each time. I started small to build the habit. The reality is that most of our lives are lived out of the automaticity of our habits. Ten dollars a week adds up to over $500 for a year. That five hundred can be invested or moved to a financial product that earns a higher yield than your basic savings account. And over the course of a year, the act of saving would become a habit. Win-Win.
Finally, I suggest that you automate the process, if possible. Set up an automatic transfer from your checking account or direct deposit. That way, you don’t have to even think about it. And you won’t be tempted to not save when another “need” arises.
Your homework for today is to decide how much you want to save in 2018. Break that amount down into monthly goals, then decide how you will save. Weekly or biweekly? Will you automate? Will you physically put the money to be saved into a separate account each time? Create a saving plan and write it down.
Challenge assignment: Tell two people that you trust about your saving plan. (Accountability is a key component when developing a new habit.) Be sure that your accountability partners are people you won’t mind asking about your finances on a regular basis.
Tomorrow, look out for Part IV!
Until next time…