Your Debt, she encourages people to begin their financial
planning by “reframing” their debt story without shaming or
negativeself-talk. “Yourself-talkbecomes reality,sothe more
youthinkyou’rebadwithmoney,themoreyouwill be,”she
says.“Youbasicallyassume,‘I’mapersonwhohasdebtorisin
debt.’”Sowhyevenbothertryingtomakeyourwayoutofit?
Emphasising the negative isn’t always accurate either. As
Simmonspointsout,it’snotjustourvicesthatgetusintrouble;our
virtuesdo,too.Researchsuggeststhatpeoplewhostrugglewith
moneyareoftenmoregenerousinsharingwhattheydohave
withothers.WhenI lookatmybankstatements,I canclearlysee
myweaknesses.I eatoutwhenI’mtootiredtocook,buyclothes
whenI wanttoimpress,buymorewhenI’vebeendumped (ditto
gettingmyhairdone).Moreoftenthannot,I’vejust
wanted toescape the restriction ofmy limited
incomebyprovingmyvaluewitha randompricey
purchase.ButI cantrace someofmyvirtuesin
thosetransactions,too.I liketospoillovedones,
IlovetobuydinnerforfriendsandI’vehelpedmy
familyoutintimesofneed(asthey’vehelpedme).
Thesethingsbringmejoy,butunderstanding
whatreally makes us happy versus what only
providesmomentaryelationisimportantincutting
back onspending. “Money isjust a tool,and
peopleusethistooltobehappy,”saysMelissa
Leong, author of Happy Go Money: Spend
Smart,SaveRight&EnjoyLife. “Youcanteach
peopleaboutmoneyandbudgets,butif youdon’t
understandwhythey’respendingthewaythey’re
spending,thenyou’renotgoingtohelpthem.”
Forme,partofthischallengehasbeenthinking
aboutthereasonswhyI’vechosenthe“tapand
run”approachtomybankaccount.Something
Leong says duringour conversation about the
connectionbetweenimpulsespending andour
stateofmindsticks withme:“Whenyouarein
astateofstress,thepartofyourbrainthatregulates
long-termrepercussionsofyouractionsisturned
off.”Insteadofpushingforward,shesays,take
aminuteforsomeself-awarenessratherthanself-
indulgence.“Ask:‘Isthisa gooduseofmymoney?
Isthispurchaseinlinewithmyvalues?’”
I decidedtousethattacticasthefirststepin
aligning my spending with both my personal
values (generosity and spontaneity) and my
goals (financialstabilityandmaturity).Withthat
in mind, I’ve since crunched the numbers,
separating myfixed expenses from the money
Icandevotetodebt,savingsandspending.I’ve
also come around tothe idea that budgeting
doesn’thavetobeabout living in what Simmons
calls “scarcity” mode.It’snotaspendingfree-for-all,butit canbeflexible,allowing
space for both planning and spontaneity. Instead of micro-
managing mydiscretionary spendingintoimpossible-to-control
categorieslike“coffee”,“magazines”and“beautyproducts,”I’ve
takenbothLeong’sandSimmons’adviceandopeneda “spending
account”.Thisiswhereanydiscretionaryincomegoes(alotless
thanI imagined,it turnsout).It’sanamountI usetosensiblyindulge
myaffectionforfancyshampooandbrunchwithfriends–the
majordifferenceis thattheamountis fixedratherthanimprovised.
Today, I have firmknowledgeof myfinancial virtuesand
vices,greaterself-awarenessanda bankingplanwitha littleroom
toplay. I almostfeel likeagrown-up. Anybody want to buy
aslightly used statement bag?E“IDON’TMAKE
ENOUGHMONEY
TOSAVE”
Thisis thebudgeting
equivalentofthe“my
dogatemyhomework”
excuse.If youinvestjust
$10a weekfromage
18,you’llhavearound
$100,000(assuming
afivepercentrateof
return)bythetimeyou’re
65.It’snevertoolateto
start– pickupthishabitat
age35,andyou’llhave
about $35,000.“IFI HEARONE
MOREPERSONTELL
MEI NEEDTOMAKE
A BU DG E T...”
Cringeatthethoughtof
itemisingeverylastlatte?
Personalfinanceexpert
PreetBanerjeesaysto
workbackwards.Think
aboutyourpriorities(food,
shelter,etc)andmake
sureyouhaveenough
moneyforthesefirst.
Add 10 percentofyour
incometothisfigurefor
savings,thenmakesure
whateveris leftdoesn’t
gettozerobytheendof
the month. But, he warns,thisstillrequiressome
scrutinyofyourfinances.
“Unlessyou’rewillingto
gooverwhereyour
moneyhasbeengoing,
you’reneverreallyin
control of your cash flow.”“INEEDMYHOLIDAYS,
MYMANICURES,MY
GUCCISLIDES...”
Wegetit.Butunless
you’rea secretheiress,
you’llhavetopickand
chooseyourindulgences.
“Assesswhatyourvalues
are– wheredoyouwant
tospendyourmoney?”
saysJessicaMoorhouse,
a financialcounsellor
andhostofMo’Money
Podcast. If it’sondesigner
shoes,thenyoumayhave
tocutbackelsewhere.
Andbeforeyou“Addto
cart”,considerthis:studies
suggestpeopleareless
likelytoregretspending
moneyonexperiences
than on things.“IDON’TWANTTO
LIVEWITHMYPARENTS
UNTILI’M 40 SOI CAN
AFFORDA HOUSE”
Whydoweequate
beingagrown-upwith
owningproperty?Alex
Avery,authorofThe
WealthyRenter:HowTo
ChooseHousingThat
WillMakeYouRich,
arguesthatif youhave
enoughdisciplineto
invest(inthestockmarket)
yoursavingsfromrenting
versushavinga giant
mortgage,youcould
come out ahead.“IWANTTOINVEST,
BUTI HAVENOCLUE
WHERETOSTART”
Setupa consultationwith
a financialplannertotalk
strategy.If thethoughtof
discussingyourspending
withanotherhumanis
terrifying,robo-investors
likeInvestSmartare
idealalternatives.Also,
doyourhomework
byreadinguponthis
stuff.TryTheBarefoot
InvestorbyScottPape- hismillionsoffans
can’tbewrong.
CASH-FLOW
GRIPESAND
HOW TO
DEAL89
MONEY TALKSMONEY
Additional words: Carli Whitwell. Styling: Mie Juel