How To Change Your Spending Habits

New Idea

I have been reading a book this week that has changed my perspective just a little bit on money and how I spend it.  The author of the book states: “If I have a book and you have $20, and we mutually decide to exchange my book for your $20, what were the book and the $20 worth to you?  What were the book and the $20 worth to me?  Most people answer that the book was worth $20 to you and me.  This is wrong.  We only give up something in an exchange when we value what we’re receiving more than we value what we’re giving up.  Hence, there is no way to quantify an exact amount that the book or the $20 was worth to you or me.  All we can conclusively say is that to you, the book was worth more than $20 and the $20 was worth less than the book; to me the book was worth less than $20 and the $20 was worth more than the book.  We both walk away wealthier than before the transaction because we both have something that is worth more to us than what we had before.”  (Killing Sacred Cows, by Garrett B. Gunderson, page 14).

Money, in itself, doesn’t have value.  We are the ones who give it value.  “We only exchange when others have something that we value more than what we currently have.”  Value is not in the money, or in the things, it is in the people.  People have intrinsic value, not things.  People make “individual, personal determinations of the value of material things.”

Shifted Thinking

This sparked some thoughts in my mind about my relationship with money.  Do I really value what I am exchanging money for, more than the money itself?  Does what I am spending money on reflect my value system, and my goals?  Does what I am exchanging my money for provide more value to me than something else I could be receiving instead (opportunity cost)?  In the book example above, I may feel that the book is worth far more than $20 for whatever reason.  Maybe I feel the knowledge I will gain from the book is invaluable, maybe the personal enjoyment of reading is ‘worth’ more than $20.  Maybe what I learn from the book will help me earn more than $20.  However, to you, the book may not be worth even $5.  Maybe it is a boring topic for you.  Maybe you don’t enjoy reading.  Maybe it is knowledge you already have.  For you, giving $20 in exchange for the book would not be a valuable transaction, nor would it reflect your value system.

Self evaluation

I want to be sure that the money I exchange is exchanged for things that I value.  Personally, I have found that I value experiences, memories, and skills over material items.  That is why I exchange money for things like horseback riding lessons, dance lessons, memberships, and activities, instead of toys, clothes, and dining out.  This isn’t good or bad, but simply a reflection of my value system.  Does your spending reflect your values and your goals?  Maybe what you think are your values, and what really are your values are different.  You can learn a whole lot about a person by what they choose to spend their money on.  As you track your expenses, and look at your spending patterns and habits, you will be able to clearly see what you value.  And, if your money is not being exchanged for things that you value, it is time to evaluate why, and make changes.  If you don’t like what you see, try ‘practicing’ exchanging your money for things that you really do value, and pass on the things that really aren’t important to you.  See what happens.  See how you feel.

 

Exchange vs. Spend

The material things we have, including money, has been given to us by our Heavenly Father.  We have an abundance of comfort, and safety, and freedom.  One way to show gratitude for what we have been given is to use these blessings to bring more value into our lives, and into the lives of others.  I love the word ‘exchange’ instead of ‘spend.’  When I think of the action of spending, it feels like loss and scarcity.  It feels like my money is being taken away and is gone forever.  The word exchange feels like a mutual decision.  It feels like an agreeable choice, that both parties are happy with.  It feels like abundance.  Once again, “We both walk away wealthier than before the transaction because we both have something that is worth more to us than what we had before.”

I am happy to exchange some of my means to the power company so that I can enjoy heat and light.  I am glad to exchange money for fuel to put in my car so we can go fun places to learn new things.  When I use the word exchange, it helps me think twice about what I am exchanging for.  Is this exchange really something that is valuable to me?  It helps me realize that what I do with my money and means really is my choice, that I am acting on it, and not being acted upon by outside forces.

Making changes with my new knowledge

This new paradigm about money, and new way of thinking about what I do with it, has helped me rethink my spending (my exchanging, if you will) and my values and goals, and if they are in alignment.  I find myself stopping an exchange when I realize I am just participating because I am bored or sad, or because someone else already has it (competition, jealousy), or to impress someone (vanity), etc., but it really isn’t something that I value.

It applies to our relationships, too

I think a lot of money conflicts in relationships can be traced back to this idea of value. Spending money isn’t the issue, it’s that one partner values what the money was exchanged for, and the other doesn’t.  This is yet another reason why communicating about your values and goals as individuals, as well as a family unit, can help alleviate some confusion and misunderstanding.  If I know my husband values something, and he would like to exchange money to obtain it, I am better able to understand why he feels it is a worthwhile exchange, even I don’t feel the same way.

 

 

What do you think?

This small paradigm shift has opened up a new way of thinking about what I do with my money and where I let it go.  It has also helped me to rethink my exchanges to be sure they are really bringing me value, and closer to my goals.

 

I’d love to hear what you think about this idea.  Leave me a comment, and let me know!

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Familiar Mom Problems, Which One Do You Want To Overcome First?

 

The Mom conference is in full swing!  It’s three days of interviews and speakers on topics that are for moms!

 

Here are my takeaways from yesterday’s interviews:

-The power of empathy

-How to have a soft answer (alternative to yelling)

-“I don’t do guilt”

-How to combat social media and comparisons

-How to protect my kids from pornography

-Some really great mom hacks

-Feeling abundance and fulfillment right now

-How to combat anxiety and depression

-Changing my thoughts = changes the way I feel

 

Today some of the topics are:

-The power of play

-How to gain more cooperation from your kids

-Meal planning

-Makeup tips

-Strengthening your marriage

-How to travel kids

 

The conference started yesterday, and continues today and tomorrow.  The interviews are available for 24 hours.  Or, you can buy the package for $67 and have lifetime access to the interviews, to watch and learn from as often as you need!  There’s an additional package, for $97, that includes a whole bunch of extras, books, worksheets, etc. that are invaluable.

 

I just wanted to let you know about this, because it’s such an AWESOME resource for moms and women!  I’ve learned many things that have helped immensely, in my relationship with my kids, and, especially with myself!

 

Here’s the link if you want to watch:

https://www.theconferenceformoms.com/squeeze-page-16949738?affiliate_id=821642

 

Here’s what the Mom Conference has to say about what it’s for:

You work hard to put dinner on the table, make sure your kids don’t look homeless, and run them around to soccer, dance, and piano.

Sometimes it feels like a vacation to go to the bathroom alone, or on  a solo shopping trip to Target.

You equip them with everything they need clothes, food, a bed to sleep on, but how do you equip them with kindness, respect, and self-motivation?

Your deepest desire is to raise successful adults but how do you teach them what they need to be successful now?

And what about you?  You need a break, but feel guilty taking one.

And we haven’t even gotten to your marriage……

As a mom, you wonder how to do it “all” and still have time for yourself.  

While I wish I could help you get the kids to bed, pick up groceries for you, or watch your kids so you can go out on a date with your husband.  What I can do is even better.  I can give you practical solutions from experts on the hard stuff  that parenting throws at you.

With over 20 personal interviews on these hard topics with your favorite authors, speakers, and bloggers at The Mom Conference.

WHAT IS THE MOM CONFERENCE?

The Mom Conference is a totally FREE three day online event.  It starts October 17,18, and 19th.  You can listen while you fold laundry, do the dishes, or during nap time.

Attend the conference with over 75,000 moms around the world and come away armed with powerful new strategies for everything from sibling rivalry to meal planning to finding more joy in motherhood.

Register for FREE here:

https://www.theconferenceformoms.com/squeeze-page-16949738?affiliate_id=821642

 

WHY ATTEND?

There are so many hard situations as a mom that you wonder if you are handling things the right way.  Sometimes all we need is a paradigm shift or better tools.

During the conference, you will have the opportunity to learn practical solutions to the hard stuff that motherhood throws at you. Things like:

  • Getting out of the cycle of yelling, nagging, and reminding to get your kids to listen
  • Managing sibling rivalry, when to step in or when to let your kids work it out
  • Setting up routines so you can have time for what’s most important to you
  • Keeping  your kids safe online
  • Effectively managing depression and anxiety
  • Keeping up with a busy house-hold; you’ll learn the best of the best mom hacks
  • Living a more intentional and joyful life (and teach your children to do the same)

And much more!

Do you want to know who is speaking?? Here is a list of some of the incredible presenters:

  • Dr. Laura Markham, Clinical Psychologist, bestselling author and discipline expert at Aha Parenting
  • Ruth Soukup, NYT Best-Selling Author and Founder of Living Well, Spending Less
  • Amy McCready, parenting expert, TODAY Show Contributor, author and creator of Positive Parenting Solutions
  • The Bucket List Family, Full Time Traveling Family, @bucketlistfamily with a community of over 600,000 followers
  • David Burns, expert on anxiety and depression, NYT Best Selling Author, 5 Million Copies Sold of His Book

CLICK HERE TO SEE A LIST OF ALL THE SPEAKERS (Affiliate link here)

And to help you avoid procrastination (we know how it goes!), if you register RIGHT NOW, you’ll have access to the following FREE GIFT as soon as your registration has been completed!

– A FREE Listening Guide for Dr. Laura Markham’s interview on sibling rivalry.  Get a sneak peak on the key take aways from her interview.

Participate ONLINE and be inspired October 17, 18 and 19th!

Register for FREE today:

https://www.theconferenceformoms.com/squeeze-page-16949738?affiliate_id=821642

 

XOXOX

 

Secrets to commitment

I have a secret.  I have tried to stay away from using too many personal details on this blog.  Why?  Mostly because I want my situation to ideal before I share it.  But, guess what?  It’s not.  We’re still working on it.  We still have debt.  Not only that, but it is (gasp!) credit card debt.  Ugh.  I despise it!  I want it to go away.  And guess what?  It is!  Because…we have a plan!  And we are working that plan.  And we know what to do.  And we are doing it.

We have $4,000 in credit card left to go.  In January we had $8,500 plus an orthodontist debt we were making monthly payments on, totaling $1,300.  We’ve come so far already!  After we finish off the credit card debt we will tackle our auto loan and then our balances will be paid in full!  I am sharing this because I want to say a word on commitment.

I have been reading about personal finance for years.  I have been creating and balancing budgets (mine, and other people’s) for years.  I have been preaching about the harm debt can do, especially credit card debt, for years.  And yet, I was still using my credit card.  And not being able to pay off the full balance each month.  Mostly the reason was because we hadn’t developed a good system to save for periodic expenses.  (More on how to do that in an upcoming post!  Stay tuned.)  So, when the car needed repairs who came to the rescue?  Good old Discover card.  When it was time to make the bi-annual insurance payment, who bailed us out?  Yep, our frenemy the Discover card.

In August, I began training for my new position as a financial coach (now we are called finance personal trainers), and began coaching in October.  The more I counseled with my clients, the more I felt the credit card balance weigh me down.  How could I tell my clients to stop accruing debt, when I was?  So, in January I (finally!) said enough is enough!  I was scared to stop having access to the credit cards, because of the ‘

no credit card allowed sign

what ifs.’  What if there was an emergency and we needed funds?  What if my husband runs out of gas on the way home from work and we didn’t have money in the bank account for gas?  What if registration for the kids’ swimming lessons comes before our next paycheck?  (Ha-as if these things were truly emergencies!)  But, I had been asking my clients to commit to the plan, and to stop accruing debt.  So…..I needed to, also!!  On January 28, I knelt down and prayed.  I told Heavenly Father I was sorry for living beyond my means, and for not having enough faith to use my resources more wisely, and to place my needs and desires in his hands.  I told Him I was sorry for not being grateful enough (because that’s what using debt is, isn’t it?  Not being grateful for what we have, wanting more than we’ve been given?).  I told him that I would not be using debt anymore.  I asked for His help to be able to be more wise with our plan, and to be able to meet our needs as a family.

 

Then, I got on the computer and put a freeze on my Discover card.  Meaning, I could not use it anymore!  Then, I opened my budget and worked and re-worked the numbers to be sure that we were setting aside money for periodic expenses (insurance payments, Christmas, car repairs, medical bills).

 

And since January 28, we have not accrued more credit card debt!  And it has been amazing to see the abundance that we have been blessed with because of it.  By abundance I don’t necessarily mean money.  Somehow, we have been able to meet all of our needs, and even our wants (like swimming lessons and going out to eat occasionally).  We have been blessed with extra sources of income, and the ability to work hard to take advantage of these opportunities.  We have been blessed with good health.  We have not been to the doctor for illness all year!  With four kids that is a BIG deal!  I truly believe it is because of our new commitment to be wise, grateful, and stop using debt.  Our cars have been working as they should.  And, I can even feel the Spirit better in our home.  The kids have become more involved as we have explained to them our commitment.  We have our coloring charts (thanks to http://www.debtfreecharts.blogspot.com) that we get to color in during family council.  They have been more acceptable when I have to tell them ‘no’ (which I do a lot more these days).  They are learning about opportunity cost – if we buy that toy today, we won’t get to go the waterpark next week, or be able to buy our friend a gift for their birthday party tomorrow.

 

It sounds silly, but making the commitment to put away the card was harder than it should have been.  But, the blessings have come because of the commitment.  Our goal is to finish off the credit card by the end of this year (depending on a work bonus on top of our monthly payments, and fluctuating side income (donating plasma, doing transcription, and participating in a research study on multi vitamins, and how many hours he can get at his side job at Smith’s.))!

So, what is the secret to commitment?  There is no secret.  It’s more than a wish, a hope; it’s more than trying, or even wanting.  It’s diving in with both feet.

We have been blessed because of our commitment.  Everyday, in my prayers, I ask for help to be wise, and to be able to continue the uphill climb.  But, our commitment is full.  And the blessings are coming, because of that.

What commitment will you make today that you have been putting off, or afraid to make?  What makes you afraid of the commitment?  Take it to your Heavenly Father, ask Him for help to make the commitment.  And then do it.  We made the commitment before we had the plan.  I wasn’t sure how it was going to work, but the plan developed after the commitment was made.  Don’t wait until you think you are certain of how it will work or what the outcome may be.  Ask for the faith to make the commitment.  It reminds me of the scripture in Ether chapter 12, verse 6: “…wherefore dispute not because ye see not, for ye receive no witness until after the trial of your faith.”  (https://www.lds.org/scriptures/bofm/ether/12.6?lang=eng)

 

First the trial of faith, and then the witness.  Not the other way around.

You can do it!  And it will surprise you all the blessings that come because you did.

Faith and Finances video

This is why I do what I do.

Deborah’s story is inspirational:

 

https://www.lds.org/media-library/video/2016-12-043-deborah-faith-and-finances?lang=eng

I am excited for the self-reliance program the Church of Jesus Christ of Latter-day Saints has instituted!  There are all kinds of help and information here, including building a business, budgeting, becoming spiritually self-reliant, time management, unemployment, and so much more!  What an amazing resource for learning about self-reliance and temporal foundations with a gospel perspective.

https://www.lds.org/topics/pef-self-reliance/live?lang=eng&old=true

Thinking about refinancing your student loans?

Friends,

Are you thinking about refinancing your student loans?  What is your current interest rate on said student loans?  Do you have more than one?

As we have started our become debt-free journey (we call it “Paid in Full” instead of focusing on the word debt, by the way), one of the first things we did was take a look at our interest rates, and see how low we could get them.  Our credit card debt is at 0%, our auto loan is at 2.49% and our mortgage is at 3.75%.  While 0% on a $0 balance is the ideal, until you get there lowering your interest rates will save you a ton of money in the long run, and make your payoff journey a bit shorter.

I recently found an online personal finance company that offers great rates and services.  You can consolidate student loans, take out a personal loan to consolidate debt, and they even have mortgages. Social Finance

Better yet, you can also choose to invest with SoFi.

If I had student loans, I would be refinancing them with SoFi!  (P.S. If you do refinance with SoFi by July 7, they will give you a $200 bonus!)

Give them a look, let me know what you think:

http://www.sofi.com/share/240857

Note: If you do consolidate debt into a personal loan, cut up those credit cards so that you don’t continue to use them and acquire more debt!

*This post contains affiliate links.

 

Why can’t I stick with my budget?

Lower the perceived cost of the plan, increase the perceived value

What is perceived cost and perceived value?  Investopedia says this, “Perceived value is the worth that a product or service has in the mind of the consumer. For the most part, consumers are unaware of the true cost of production for the products they buy; instead, they simply have an internal feeling for how much certain products are worth to them.” (http://www.investopedia.com/terms/p/perceived-value.asp)

The key word is ‘perceived.’  The dictionary says that perceive means:“to recognize, discern, envision, or understand.”

An example of perception is a clean car.  Ever notice that after you go through a car wash, your car just seems to drive better?  I know after I get my car washed and I vacuum the interior, suddenly my car seems like it drives much better, and it’s value seems to have jumped a few thousand dollars.  Did anything about the car change (except for the fact that it has less dust on it)?  No.  But my perception of the car changed.

Budgets often fail because of our mind set when creating them and attempting to follow them.  The perceived cost (emotional, self-discipline, going without, etc.) of following a budget is much higher than the perceived benefit or value.  For years, until recently actually, my budget would make me anxious and feel restricting.  I felt like my budget prevented me from doing what I wanted.  That’s when debt entered.  If a desired spending option wasn’t in the budget, I would use the credit card.  That way I could get what I wanted, but my bank account still had money in it to pay the bills, utilities, etc.  I kept convincing myself that I was following a budget, because I wasn’t spending the money in the bank account.  Deep down, I felt defeat every time I used the credit card, but I could justify it because each purchase was ‘necessary’ and I was gaining cash back bonus points on my credit card, which I could apply towards the credit card balance.  With this mind set, the ‘cost of the plan’ or the ‘pain’ that a budget caused was too high.

However, once I had finally realized that this was not the way I wanted the rest of my life to go I began to change my thinking.  A few things caused my thinking to shift.  One of these was the crazy amounts of second and third jobs both my husband and I were working.  After his regular job my husband would go to the local grocery store and stock shelves until 2:00 in the morning.  I would get up very early some mornings and donate plasma.  I also picked up a couple transcription jobs and a small babysitting gig.  I realized that if I didn’t stop using my credit cards and other debt, we would be on this cycle forever – working a six different jobs just to pay all the bills and the debt.

Another reason for my shift in perception was my children.  Two of my children were diagnosed with ADHD last year.  In addition, one received a diagnoses of general anxiety and the other of mild ODD (oppositional defiance disorder).  Because of this, I had been looking into interventions to help them learn coping skills and improve their focus as well as provide peace for their emotions.  One thing that helped them very much was therapeutic horseback riding.  It had amazing benefits and results!  But, it is not a low-cost activity.  I realized that I could not afford to keep taking my girls to this activity, based on our debt load and payments.  This really hit me hard.

So, I decided enough was enough!  I vowed to live according to my budget, to live within my means.  I put a freeze on all of my credit cards, so that I could no longer use them.  In addition, I took my commitment to my Heavenly Father.  I told him I would no longer live above the means that he had provided for us.  I asked for his help to be able to continue in my commitment.

All these things changed my thought on the perceived ‘cost’ or ‘pain’ a budget caused.  I now saw it for what it was – rules to live within so that I could become free and have peace.  Rules that would help me to be able to, eventually, achieve the things I want, and provide opportunities for my children.  Now the perceived cost of a budget was no longer high and unbearable.  It was, instead, a symbol of my commitment to myself, my family and to my Heavenly Father that I was grateful for all of my abundance and that I would be a better steward of the things I had been given, including my time and my finances.

How can you change your perception about your budget?  Some people find it helpful to call their budget a ‘spending plan.’  It sounds less restricting and more fun.  I, however, saw through this and knew it was still the same thing.  Nothing was as powerful to me as finding my ‘Why.’  Once I found my why, then suddenly my budget was my tool to help me to get to my goal based on my ‘Why,’ instead of a barrier or restriction.  Watch for my next post when we learn about finding our ‘Why.’

 

Why do you think it’s hard to follow a budget?

Have you been able to successfully follow a budget in the past, or do you do so now?

Do you know how to create a budget that will work for you?

A great article while you’re waiting….

I have taken a break from the blog, in order to train and begin my job as a Financial Coach for Mvelopes.  I love it!!  It’s amazing to talk to people who have a desire to improve their financial situation and be able to teach, encourage and help them!

Now that I have developed my new coaching schedule, I am back to working on some new blog posts, so stay tuned.

While you’re waiting, here is an excellent talk from General Conference about personal finance.  It’s called “Greed, Selfishness and Overindulgence” by Joe J. Christensen.  Some favorite quotes from this talk:

“If we are to be self-reliant and in a position to share, obviously we must acquire some resources. If we live within our means and avoid debt, resources can be accumulated. There are those with average incomes who, over a lifetime, do amass some means, and there are those who receive large salaries who do not. What is the difference? It is simply spending less than they receive, saving along the way, and taking advantage of the power of compound interest.

Financial consultants indicate that “most people have it all wrong about wealth. … Wealth is not the same as income. If you make a good income each year and spend it all, you are not getting wealthier. You are just living high. Wealth is what you accumulate, not what you spend.”

“Our resources are a stewardship, not our possessions. I am confident that we will literally be called upon to make an accounting before God concerning how we have used them to bless lives and build the kingdom.”

Check out the full talk:

https://www.lds.org/general-conference/1999/04/greed-selfishness-and-overindulgence?lang=eng

 

And, for extra credit, here is one by Elder Perry about Self-Reliance:

https://www.lds.org/general-conference/1991/10/becoming-self-reliant?lang=eng

How to Feel Beautiful

My three year old saw a picture of a woman in one of my hair style magazines that I was looking through (to find a cute style for my upcoming hair cut appointment). One of the young women in the magazine looked a lot like her preschool teacher. She excitedly exclaimed that she found her preschool teacher in my magazine! The lady in the magazine, I am guessing was in her early 20’s, and my daughter’s preschool teacher is, I’m guessing, in her early 40’s. I took a picture of the picture in my magazine and sent it to the preschool teacher and let her know that my daughter said it was her. The preschool teacher was so thrilled. She said “These littles think you’re beautiful no matter what! Made my day.”

Mom

That made me think about how much I love my mom. I don’t love her more if she’s thin, or less if she’s put on weight. I don’t admire her less if she doesn’t have make up on. I don’t think she is even more incredible if she has cute shoes. I love my mom because she is my mom. I don’t care or notice what she’s wearing, or how cute her hair is that day. I already know that she is amazing and incredible and I love her.Mom and child

 

This train of thought brought me to today. This morning, I walked into the room where my 8-month-old was playing. She looked up and saw me and the biggest smile spread across her face. The kind of smile that makes her eyes twinkle and her nose scrunch up. She loves me. She loves me if I’m in my work out clothes, crazy hair, and red-faced and sweaty-stinky from a work out. She loves me in the middle of the night when I check on her, with groggy eyes and hair sticking out everywhere. She loves me when I’m all dressed up for church. She loves me when we are hanging out in our pajamas. She doesn’t care. She loves me because I am me.

My fourth baby was born when I was 34. I noticed a huge difference in my recovery this time around than when my first was born when I was 26. Things happened a bit slower, including the weight loss, and getting back to ‘normal.’Mom and baby In fact, I’m not quite there yet, despite my best efforts over the last 8 months. When I start to get down on myself, and compare myself to others and wish I was thinner, prettier, more athletic, had more stylish hair or clothes, etc., etc., I remember that cute baby face smiling at me when I walk into the room. I remember how excited she gets when I pick her up – her legs kick and she wiggles, and snuggles into my neck. I remember all the cute letters my kids write for me about how much they love me because I ‘make good dinners’ or I ‘help them clean their rooms’ or I ‘play games’ with them. They don’t say they love me because I’m pretty. They don’t say I’m the best mom because I know how to do awesome eye makeup. They tell me they love me because I’m ‘the best mom ever.’ They love me because I love them.

Friends

I also think of my friends. The dear, good friends who have loved me through so much, who love me because they know who I am deep down. The friends that I can have over Good friendseven when my house looks like a tornado has come through, I haven’t washed my hair, I have circles under my eyes, and the kids are grumpy. These friends know who I am and they love me. We always laugh together, reminisce and leave feeling uplifted and loved.

I think of my husband who has seen me at my very worst, and my very best. He loves me when I’m grumpy, he loves me when I’m nice. He notices when I make the effort to look nice, but will still be seen with my in public when I’m not looking so nice.  He loves me because he serves me and he knows who I am on the inside, not the outside.

Love

When the world starts to get to me, and I begin to think I am not enough, and that I don’t measure up, I remember the people who love ME. My parents, my children, my husband, my dear friends. And I remember the people that I love. Those are the people I want to impress. Not impress them with beauty or style or perfection, but with kindness, and love and fun and smiles. It’s easy to get down sometimes, especially when we compare (must stop doing that!), but when I think about who and what matters most, suddenly all of the vain ideas coming from the outside seem silly and unimportant. Because they are. We are children of God, and He loves us above all.

True Beauty

Another story came to mind that a friend told me recently. My friend was at the playground at the same time as another mother. This mother was quite plain, her clothing was not stylish, and her hair was pulled back into a quick ponytail. But the feeling she left after their conversation was beautiful. My friend walked away feeling uplifted and happy. She said that the woman became truly beautiful, because of the way she made my friend feel. That is true beauty.

I want to be beautiful like that.

How To Spark Change

Change is hard. Changing our habits is even harder. Change takes effort, energy (both mental and physical) and often requires a lot of courage. I believe that making financial changes may be some of the hardest changes to make (similar to changing our eating or exercise habits!)

Henry Cloud said “We change our behavior when the pain of staying the same becomes change-same2greater than the pain of changing.” I repeat this quote to myself daily, sometimes several times a day as I remember why I am making the changes. In my previous post I talked about pain – enduring small pain now to avoid greater pain in the future. This often involves change.

 Things needed to change

My change happened when the pain of staying the same was much more than the pain of changing. We were in over our heads. We had credit card debt, student loan debt, car loan debt, a mortgage, and just couldn’t pay everyone what they demanded. Our grocery budget was tight, there was no money left to spare. I will always remember the day: I had just done a load of laundry and was hanging my bath towel back in the bathroom after being washed. I looked at the towel. It was once a white towel. Now it was off-colored and stained and the edges were worn. And I could not afford to go and buy myself a new towel! I had two little girls to feed and started to panic. I couldn’t even buy myself a new bath towel. We were one paycheck away from disaster if a lay off happened, or a disability, or even a repair as minor as a broken dishwasher or flat tire on the car. I vowed then and there to change! I wanted to be in a better situation for myself, but even more so, for my children.always do what you've always done

This is when the pain of staying the same overwhelmed me and I longed for change. I don’t believe change will happen until we become “sick and tired of being sick and tired” (phrase borrowed from financial guru, Dave Ramsey). It has to be an intrinsic desire for change. No one can make us change. Not real, lasting, life-altering change. This has to come from the inside, from a purpose and a reason and a drive to make the change(s). We’ve all heard the quote “If you always do what you’ve always done, you’ll always get what you’ve always got.” (attributed to a few different people).

I knew that if we kept doing what we were doing, we weren’t going to get where we wanted to be. That was the day I decided to change.

 

A Plan

change1After feeling the strong desire to change, how do we do it? Jacob Lund Fisker, in his book ‘Early Retirement Extreme’ says it most perfectly: “Dissatisfaction may be high and the vision of an alternative may be high as well, but without a plan, this can only lead to frustration. There must be a strategy or at least a plan, and it must be practical. To get things done, it’s much better to have a plan than to have passion, at least insofar as you act on it.”

He tells us that those wanting to change have four variables to consider:

  1.  Dissatisfaction with your present situation.
  2. Strengthen your vision of your future situation.
  3. Build a plan to get from the present to the future.
  4. Lower the perceived cost of the plan.

In the next few posts we will talk about number 1 – Dissatisfaction with your present situation. We will learn about the time value of money, compound interest, what your debt is really costing you, as well as what the cost of delaying savings is.

 Assignment

Think about your financial situation. Are you happy with where you are? Do you have a plan to improve your situation? Do you know what your situation is? (if not, read my post about calculating your net worth first).  How would you like your financial situation to be?  What do you want to change?  What are your beliefs about your ability to change?

Read Sister Wendy Watson Nelson’s Devotional address about change, which goes far beyond finances: https://speeches.byu.edu/talks/wendy-l-watson_change-always-possibility/

A little pain now, or a lot later?

 Should we avoid pain?

It was time for my baby’s six month check up appointment and routine vaccinations. Two of my older girls got to come along to the appointment as well. When it was time for shots, my older girls became concerned and asked me why the baby had to get shots. They love their baby sister and get upset if she ever cries or is in pain. They didn’t want her to get hurt by the shots.  I explained to them that the vaccines will help prevent some very serious diseases that can be very painful, and very scary and life threatening. A little bit of pain now to prevent a lot of pain later.IMG_3319

This made me think about personal finance. We need to be willing to go through a little bit of pain now, to avoid big pain later. For example, living on a tighter budget, avoiding debt, driving the old car another year or two, doing a staycation instead of going to Hawaii, resisting the urge to pull that credit card out or apply for that loan, or spending the money that is supposed to go to savings. These choices we make now will prevent a future of more painful consequences like being overextended, house poor, foreclosure or even bankruptcy, or having no buffer or emergency fund or savings when an emergency occurs. By being a bit uncomfortable now, we will reap the rewards in the future. That may be the distant future, or maybe a future that isn’t so far.

Small discomfort now vs. big discomfort later

Being able to learn self-discipline, when it comes to personal finance, is a valuable skill to learn early in life. I like to give my kids an allowance, to allow them to make money choices when they are young, when the consequences are small. Then, when the big choices come, and the big temptations are available, hopefully they can remember lessons learned in their past, and make better decisions.

One example of this scenario is student loans. Student loans are very easy to get, very easy to justify (it’s for education and education is a good thing!), quickly add up and then become difficult to pay off. What took a few months or short years to acquire can take a lifetime to pay off. However, choosing the smaller discomfort now of working while attending school, applying for grants and scholarships, attending a less expensive school or community college, will help you avoid the much greater discomfort later of paying back those large student loans, laden with interest!woman piggy bank

Naturally, we move away from things that are uncomfortable and gravitate to things that seem desirable. No doubt that is one of the reasons why credit cards have become so popular. It is uncomfortable to say no to something that we really want. It is pleasurable to indulge right now and not have to wait for the things you think you want. However, avoiding the small prick of pain now (waiting until you have the money to pay for the purchase), can set you up for much greater future pain (large credit card balance and payments, and enormous amounts of interest, for example).

Love yourself enough to allow discomfort

As I tried to explain to my kids, the shots do hurt right now, but that they will spare their baby sister much more pain later, they began to understand. And, because I love her, I will allow her to go through this small pain now, to be sure that her future is much less painful.

I realized that I need to love my future self enough to endure some small ‘pain’ now which will help me avoid much greater pain in the future.

It’s better to want than to owe!

There is a phrase I like to tell myself every time there is something that I want, but can’t pay for (and I’m tempted to pull the credit card out). It comes from a blog post by Natalie Bacon, on her blog, The Finance Girl. She said “It’s better to want than to owe.” (Her great blog post can be found here: http://www.thefinancegirl.com/how-to-create-financial-margin/)hand holding money

Indeed! I have been on both sides of the want or owe coin. It really is better to want than to owe. Wanting is much less painful than owing!

Challenge:

Take a look at your financial habits. Is there anything you are doing now that is helping you avoid ‘pain’ or discomfort now, but that will cause future discomfort? What can you do to change these habits? Pick ONE to work on. Decide how you can change the behavior now to have a better outcome in the future. (For example, pack a lunch to work one extra day a week, and put the money you would have spent on lunch into a savings account, or towards a debt, instead).