What Didn’t Work For Me
For years, I tried to dig myself out of the financial hole I’d created, without any success. Saving money and setting financial goals wasn’t drilled into my head growing up. I knew and practiced very basic financial principles like always paying bills on time, but otherwise I had no concept of how to reign in my spending and get out of the paycheck to paycheck cycle. There is plenty of financial advice to be found out there, but in my experience most of it was too extreme, complex, or abstract for me to apply in my life long-term.
Deprivation and Extreme Frugality
When I was in debt and living paycheck to paycheck, I remember going through these self-imposed exercises where I would write down impossible and restrictive budgets for the next month. I was expecting to wake up and just be different, and of course it never, ever worked. But, I had no system for keeping tabs on how I was doing and I had no specifics to my game plan – just stop spending money. So not only did I quickly forget my plan, I would often overspend out of a feeling of deprivation if I’d managed to cut spending even for a short time.
Complex Tracking and Budgeting
Much of the financial advice out there is centered around tracking every penny you spend and sticking to a strict budget. I know this works for some, but for me it just never did. My spending fluctuated drastically from month to month and I felt like the normal budget categories didn’t always work for me. And as much as I tried to use apps that tracked my spending, I never kept up with it enough to really make it work for me.
Traditional “Financial Literacy”
I’m one of those people whose eyes just sort of glaze over when financial concepts are being discussed. I’m not one to nerd out on topics like investing and tax optimization just for the fun of it. So many financial gurus lead with information about things like Roth IRAs and mutual funds, but for me that kind of financial education just never resonated. Retirement seemed so far away and I just needed to know how I could get myself to live within or below my means now. To me, the resources out there were just uninspiring.
How I Made a Lasting Change
For me, it was only when I found a why that truly resonated with me that I could make a change. Learning tools and going through the motions was all good in theory, but never stuck in a meaningful way because deep down I was not connected with any sort of purpose. There are a few key elements that made all the difference.
Envisioning Out-of-the-box Opportunities
The idea of retiring before 65 had never crossed my mind. This idea that we must work well into our 60s or 70s is so engrained in our culture, and I had never stopped to question why or seen an example of someone breaking that mold until I stumbled on Mr. Money Mustache. My concept of what the future had to look like was broken wide open in the best way. Even though extreme early retirement a la MMM is not my personal path, my eyes were opened to an entire movement and community of people who are willing to take a different approach to life in order to pursue what matters most to them. Through the FIRE community, I was introduced to concepts like CoastFIRE and Work Optional. I learned how to think outside of the timelines and priorities that society imposes on us. Most importantly, I learned the power of money in creating whatever life you envision for yourself.
Valuing My Why
Money for the sake of money was never important to me, and in many ways I used to spend it like it was there to just give away to everyone else. Once I began to understand that there were many more possibilities and options out there for me if only I could get control of my money, I started to give serious thought to what was important to me for the first time. Maybe that sounds crazy, but I think it’s incredibly common, especially for women, that we let everyone and everything else tell us what to spend our money on. I realize now that I was so busy saying yes to everyone else and succumbing to the power of marketing and societal norms that, for all the money I spent, I rarely spent money intentionally on my own priorities. The first step in putting a stop to that was to figure out what my priorities were.
Small Changes, Consistently
If you’ve ever yo-yo dieted, you know that expecting lasting change from imposing a drastic diet usually doesn’t work out. Instead, small changes made consistently over time tend to yield better results for your health. And the same is true for money. I moved away from the extreme budgets of the past and instead let my new mindset guide me in making gradual changes over time. That old feeling of deprivation and resulting “rebellion” was no more, and these small habit changes grew on each other as I started to effectively chip away at debt and see my savings grow. The incremental progress I saw was all the motivation I needed to keep going.
Simplicity
While I know complex budgets and time consuming spending trackers haven’t worked for me in the past, I do know that some level of tracking is important for keeping a pulse on how well my habits are aligning with my goals and true priorities. I set up a couple of very simple trackers that keep me accountable but, most importantly, don’t take a ton of time or any money to use. By setting a couple of minutes aside regularly to check in with myself, I’ve been able to course correct when needed and take pride in how far I’ve come.