Building Good Financial Habits
One of the toughest things to do in life is to maintain a new habit. Even when we are all but sure to benefit, not falling back into old behaviors is inherently tricky. While deciding to make a change is essential, the fact is that it is the easy part of the process. Staying the new course, no matter how tough things get, is the real challenge. It’s not that we don’t see a need to do something different; once we become accustomed to a specific way of doing things, it is nearly impossible to change.
We need to make a real impact immediately. The best way to do that is to silence the voice in our head trying to tell us that all change is bad. Don’t let it talk you out of making things better for yourself. It’s not its fault — it doesn’t know any better. Understand that its job is to discourage you from changing because doing so is hard. Maintaining the status quo is easy, and it won’t lead to you getting hurt. Fight the initial urge to give up on yourself before you’ve even tried.
Realize that what you are doing now isn’t working. If it were, you wouldn’t be looking for ways to make things better. The voice in your head will come up with a lot of reasons not to do this, but don’t listen. To help you prepare, here are four common excuses and reasons why each of them is garbage.
Something is comforting about buying a cup of coffee. You go in, pay your money, and in little time a barista or baristo hands you a warm cup of comfort. You paid for it, and moments later, you got it.
Investing doesn’t work that way.
You purchase a stock, bond, mutual fund, etc., and then patiently add to the fund over several years before you get to benefit. In the meantime, you miss out on a whole bunch of entertaining stuff because of steadfast devotion to your financial future. Eventually — sometimes many years down the road — you get to enjoy the fruits of your patience.
It’s nowhere near the same as a warm cup of coffee.
You’re right; it’s not. No one is asking you to stop enjoying things, only to commit your future self to cut back. Diligently mix delayed gratification efforts in with an occasional instant ‘fix.’ Are you compromising? Yes. Are you doing irreparable damage to your standard of living? No. Will you benefit in the future? Absolutely. Not getting something right away a few times will show you that waiting is not that big of a deal.
Compromise. It’s the best of both worlds.
You’ve grown up without money and watched your parents have the same hushed-tone conversations that you find yourself currently having.
Those conversations are the worst.
Continually being on defense is the worst. You resort to checking the mail every few days to keep from seeing the late notices, screening your calls to avoid the bill collector, putting your last few dollars into the gas tank while wishing tomorrow was payday, and so on, and so on, and so on.
It’s time to break the cycle of helplessness. Define a goal and make a plan to reach it. If you don’t know something, research it and learn. Rinse and repeat.
Don’t be fooled. It won’t be easy at first. Grab the mail daily and answer the phone. Have soul-draining, shame-inducing conversations about the money you owe, make payment arrangements, and stick to them.
Understand that you are saving money so you can eventually get beyond this feeling. It will take time, but it will get better.
It is too late to start
To borrow heavily from an ancient Chinese proverb, the best time to start is twenty years ago; the second-best time is today.
You missed the first best time, but you are sitting squarely in front of the second.
Regardless of your current age, you will gain from making a positive change and financially preparing for the day that you won’t work — or won’t want to work — anymore. The result may not be as dramatic as it would have been had you begun earlier, but you will benefit regardless of how many years you’ve spent on Planet Earth.
Experiences create memories, possessions do not. So what if the yacht you’d dreamed of buying after retirement ends up being a fishing boat? Both outcomes have you on the water enjoying life.
It’s not too late to get started. Get going.
It is Too Complicated
“But, I never learned how to save or invest my money.”
If that’s true, it’s a lame excuse. At one time in your life, you’d never learned to walk, but eventually, you took your first steps. You never learned to read but figured it out after a while. You never learned to drive but accomplished that too. All of these things were hard at first, but each of them became easier.
As with anything else, a little common sense will go a long way. Your mission isn’t to change the world, it’s to create a universe in which you take in more money than you pay out. Don’t let your head get in the way of a better life. Do some research, make a plan, and get in the game. You can do it.
Other excuses hold the same amount of water, but don’t let any of them get in the way of your future successes. The world will continue to spin whether or not you choose to take this journey, but you’ll eventually have a much more enjoyable ride if you do.