It is challenging for many people to discuss feelings of financial fear without a sense of shame. Behind closed doors, people may open up about their feelings and embarrassment and be honest about their current financial situation. By voicing their fears or shame, many people feel as though a weight has been lifted and can then take stock of where they are; to formulate a plan to get financially fit.
Financial shame often comes from not living up to a particular ideal. It may be a false expectation or a false belief. The banker “tells” you that you can afford the monthly payment for a brand new home. The car dealership points out that you can purchase a new car and keep your payments the same. Ads on television “sell” us a dream: we deserve to have all the “things” we want now. You may believe you should own a big home, multiple cars and provide for all of your extended family, but perhaps you lost your job, and that is no longer possible. Many of us live with an illusion of the sort of person we should be (or what we should have) rather than being honest about our situation.
It is smart to have an accurate benchmark for what you consider to be a healthy financial goal or lifestyle. For example, you may want to have 500,000 dollars in your retirement savings account as your measure of being financially healthy. Not meeting that benchmark doesn’t mean you are a bad person. However, it may result in a different outcome. If you have 485,000 dollars in your savings account, don’t beat yourself up over the difference, but if you only have $45,000 saved for retirement when you turn 65, be prepared to live on a lot less than you are used to. You are delusional if you think you can postpone saving and live in better style than you do now.
Most people imagine that their retirement will be even better than their current situation and will live exactly as they do now — if not better! But the reality is that many of us have not saved enough money to make those dreams come true. Now is the time to keep feathering the nest. Make an appointment with your CPA or a financial coach who can help you assess your net worth and develop and a plan for staying financially fit. Creating an honest budget and reevaluating what is important long-term may change some of your choices today. Our current cultural and political mindset of deserving it all now and never stopping to say, “I can’t afford that,” isn’t doing you any favors. Set yourself apart, be honest with your money choices. You can do it. You can live abundantly for many years to come.
One of the most asked questions I get is: Do I Pay down credit or save? I say do both at the same time!
If a lower income is the cause and you hate your job, find your passion and work in that field. If you don’t have skills, take classes. While the classes may have a cost, the benefits often generate higher income. Just like a game of Monopoly, when you circle around the block each month, you can pick up that extra money!
If you hate being broke, start saving. If you are unhappy with your debt, make a plan to pay it down while curbing spending. What is working for you and what isn’t? Start creating your financial freedom now, even if it’s scary or feels too big. Making proactive choices is the way to begin heading in a new direction.
Financial security may feel like it is unattainable, but you may need to change your perspective. The cure for being financially overwhelmed is persistence and knowledge. Want to know the best way to a robust savings account? It is one step at a time! Pay down credit on your lowest balance and then start saving ten dollars per paycheck knowing that, over time the account balance will add up to a significant sum. In that way, you can create a new habit that is not painful and creates more wealth.
Surround yourself with books and people that provide financial advice or go online to reputable sites. If you are more comfortable with personal interaction, try to find a personal friend or colleague who excels in your area of weakness, then schedule a time to have coffee with them, and seek their advice.
Financial stability may not happen overnight. Setting goals starts the journey, and you may find the distance to realign your life is closer than you thought. Just put one foot in front of the other and get moving! Pay down your credit AND Save.
Have you ever heard Aesop’s fable about the grasshopper and the ant?
The grasshopper loved hopping about and singing during the warm summer. One day he saw an ant working hard to move an ear of corn and cried out, “Why in the world are you collecting food on this bright and beautiful day? Stay and play with me!” The ant shook his head and said, “I am saving this for the cold winter, and you should do the same.” The grasshopper laughed and went off to play but perished during cold weather. The moral of the story: It is best to prepare for the days of necessity.
The story seems harsh, and many people wish for a fairy tale ending where others solve all of our financial dreams (i.e., winning the lottery, getting an inheritance, marrying a rich spouse). In 1934, Disney created the delightful film short “The Grasshopper and the Ants” where the Ant Queen and her colony felt pity for the grasshopper and took him in during the winter. Have you ever seen the video? Check it out below.
Sometimes a project or goal seems so far away that it is easy to procrastinate. There is so much time left and we get bogged down in our busy-ness, that daily decisions feel more urgent and important than long-term investments in life.
Reality check: It’s your life; it’s your money! How are your plans for retirement going? Do you have savings for a rainy day? Life happens – when you least expect it.
Saving and spending are part of living a life of abundance. Let’s change the words being used from short-term desires like “I need those shoes” to some long-term goals such as, “I am making better choices with my money, to maintain my lifestyle when I get older.” As you discover the best balance between living for today like the grasshopper and stashing some wealth like the ant, you will come to realize that both are investments in yourself.
Ignoring regular maintenance on your car because you don’t want to spend the money can result in major car expenses down the line. In the same way, poor spending or saving habits may also result in a later retirement and fewer choices down the road. What should you do?
Here are three easy ways to get started:
1. Take the quarterly plan you created last week and imagine retirement is a “big purchase” like a house.
2. Determine the price of this long-term goal (the amount of money needed) with this calculator.
3. Tweak your quarterly plan (budget) to begin investing toward your targeted “quality of life” in your later years. You will be glad you decided to invest in yourself!