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What a time to be writing about spending. As I watched Hurricane Irma wind its way toward Florida, I can’t wrap my mind around the amount of emotional and financial devastation. This would be a good time to think about an emergency fund that is funded slightly or not at all. Yes, I know insurance covers some costs and FEMA comes through, I lived through Hurricane Sandy. But I saw a Facebook post the other day from a Florida resident explaining that she wasn’t evacuating because she had no funds to leave. I remember the same from New Orleans residents when Hurricane Katrina blew through Louisiana. I can’t imagine not having an emergency fund to escape a dire situation, but, according to the stats, it’s a common position.
Let’s get this straight: Less spending = more emergency fund.
I request your fixation on the next two suggestions.
Entertain the “Enough” mentality in your life
If you reach the Enough mentality, mark the day on the calendar. It’s a worthy milestone of your financial maturity. Too many people don’t know what ‘enough’ means. Marketers love these people and are happy to indulge your lack of ‘enough’. ‘Enough’ means that you have reached a saturation point with your personal merchandise, take-out dependence, or whatever it is your bank account is hemorrhaging from. It means that you’re happy with what you have and don’t need to cure boredom by spending endlessly. Start feeling OK with what you have. You don’t need any more clothes, furniture, shoes, wall hangings, candles, tablets, monthly subscriptions, sunglasses, makeup, cologne, curtains, or car accessories. Live with what you have and realize that you can live without, too.
Cure yourself of “present bias”. This is a concept explained in Tony Robbins’ Money: Master The Game. It’s not about getting presents, it’s about planning for your future. Unfortunately for your retirement plan, your brain is not automatically on board. The brain leans in favor of immediate gratification and what’s happening today, not tomorrow. Know the feeling? Adding to this, it’s not natural to envision the future, or it seems so distant, that saving for retirement feels as unnatural as living Benjamin Button’s life. “I’m not old, why should I have to save for it now?”, or “That’s such a long time away, I’m putting $X money into my 401(k)” may not cut it.
I have trouble envisioning my future as well. I was not blessed with any prophetic skills, so I can understand the resistance to padding the budget of an age that you hope not to be. No 35, 40, or 50-year-old wants to turn 70, but, probability speaking, it’s inevitable.
Crystal-ball abilities aside, what I do relate to is seeing my savings snowball into a bloated balance. When it keeps increasing, I psych myself out to keep the momentum going. That becomes more important to me than buying new stuff. When I do reach a fat, healthy balance, then I refer to my spending list and pick one or two items. Mind you, some of those things may have been on the list for a year or two. That’s how rigid I am. If even a shred of my rigidity rubs off on you by reading this, I will take a bow.
While you can’t control a Category 5 hurricane visiting your town, you can control your spending. Here’s your spending homework:
|Tasks||Create a spending list|
|Re-visit your budget before making purchases|
|Separate needs from wants|
|Find less expensive means, i.e., Craigslist, garage sales|
|Try using cash only|
|Create distractions from spending|
|Browse thrift stores|
|Stay away from the stores altogether|
|Buy discounted gift cards|
|Use a cash back credit card|
|Use a travel points card|
|Books/Magazines||Money: Master The Game by Tony Robbins|
|Websites to follow||https://www.mint.com|