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JIm Stovall and Tim Maurer, CFP
In our most recent video, "Worse Than A Hangover," I committed to sharing publicly my (non-New Year's resolution) financial commitment, so here goes...
ReplyDeleteI hereby commit to abolishing willful ignorance in the realm of my cash flow and budgeting. You see, throughout most of the year, I operate fairly closely to my budget. I’m generally aware of where I stand in a given month or quarter and I know to reduce or restrict spending in areas where my budget is thin. But there are also times when I have a pretty good idea that I’ve overspent in a category or categories and decide, regardless, to spend without care.
One example in 2009 when I allowed myself to become purposefully unaware of my cash flow was the time between Thanksgiving and New Year’s Day. With children ages four and almost six, the magic and wonder of the Christmas was fully realized, and quite frankly, I was quite in the mood to give… and in a few cases, I was both the giver and the give-ee! Part of this was a good instinct—I didn’t want to let budget minutia dampen what can be a very special time to focus on faith, family and friends; but part of it was more of a childish instinct to not deprive myself of something that I might want!
But beware the danger in a commitment like this. The danger is that one can become a miserly budget tyrant—a Scrooge (pre-conversion), if you will. So how do we make it through these tough stretches throughout the year when we have a tendency to want more excess in our budget? We plan for it. If you celebrate Christmas, I recommend that you create a Christmas budget item; not just for gifts, but also for everything else that surrounds the holiday (buying a Christmas tree, home décor, host and hostess gifts for parties, a few extra meals out). You may celebrate another holiday with different dynamics, or you may know that your weakness is something else, like the summer season. I don’t want to snuff out those good urges in us to occasionally loosen the purse strings or be spontaneous, but I’m not contradicting myself when I suggest that you can plan for spontaneity in your budget.
Finally, it would have been irresponsible to make this commitment on my own—my beautiful wife Andrea had to be a part of the decision. So when I initially presented this notion to her, we took a couple days to think about it and ensure that this commitment was one that we could make together. 50% of the 50% of marriages that end mark financial issues as the primary contributing factor. Even if you have a good idea to which you’re ready to commit, you could actually do more damage to your finances—and your marriage—if your loved one isn’t on board.
Happy New Year!
Tim Maurer
We at The Money Coaching Institute (http:/www.MoneyCoachingInstitute.com) work with helping people identify, understand, and shift patterns of behavior that are not working well in their money life. These are many and varied, from overspending to hoarding, from giving freely to holding strings, from not paying attention to details to micro-managing oneself and others, and much more.
ReplyDeleteBreaking a pattern is one of the most difficult things a person can do. It's replete with setbacks in which we break a pattern, then find ourselves back in the pattern, then go break it again. DON'T BEAT YOURSELF UP!!! It's important to give yourself a pat on the back every time you overcome an old pattern and follow the new one, and to tell yourself you love yourself even if you slip and backslide.
Pattern shifting is tough because it involves some real physiological change to the way our brain processes the information, from the recognition of the pattern or cycle beginning, through the discomfort and self-talk of the realization of the pattern shift, to the satisfaction felt from having consciously made the shift or change. All are tied to the brain's chemistry.
An example of how strange it can feel to begin a new pattern is to simply clasp your hands with your fingers interlaced. Notice which thumb is on top. Now reclasp your hands, but with the other thumb on top. How does that feel?
Now switch back and forth, ending with the "other thumb" on top again. Now how does it feel? Most say that it's not as "creepy or strange feeling" as the first time, but still not "comfortable." However, if you make a conscious effort at clasping hands with the "other thumb" on top every time, it becomes a pattern and will move from normal to natural.
When you're shifting a pattern that involves money, which is a core survival tool and one for which people will kill others, the challenge is even greater. The urge to fall back to what is comfortable can at times override the logic behind the need for the change. Be patient with yourself. And celebrate your accomplishments even though you occasionally falter.