Thursday, December 31, 2015

Changing my Mindset

My First Mindset Change. It wasn't a New Year's resolution, but in early 2013, I vowed to not incur any new credit card debt. It took a few months, but by the summer, I knew I could keep it up and didn't look back.

My Second Mindset Change. I can't pinpoint this one exactly, except maybe to say when I started using YNAB. Obsessing over the budget screen helped me to look at my spending differently. Suddenly, making my lunches felt like a better plan. Then, giving up cable. I focused on decreasing my monthly have-to bills so I could spend more money on things I really enjoy, like going to see live theatre.

My Third Mindset Change. I loved when I got off the paycheck-to-paycheck cycle and started living on last month's income, but I still couldn't see the value of a large chunk of money in the bank...except it was nice to think about ways to spend it.

This year, my mindset change has been to appreciate the concept of letting money sit, something that we discuss on the YNAB Forums frequently. I don't know exactly when it changed, but I did realize that suddenly, even though I have more in my Emergency Savings than I've ever had before, I'm more focused on making that account grow than I am on thinking of ways to spend it. I have mini-goals planned that I'm working towards, but I also plan to just keep letting it grow indefinitely.

This mindset change has also affected my retirement planning. I decided to increase my 401k contribution and then was so excited to discover that it had a way for me to automatically increase it annually! I was a little frustrated with myself that this didn't occur to me before, but I'm trying to accept that as long as I'm moving in the right direction now, I just have to keep doing what I can do now.

But the point of this post is not to boast or brag. None of this has come easily for me, yet I am discovering that the longer I keep at this, the better I'm getting at it. Certain lifestyle changes which seemed unthinkable in years past have become a part of everyday life. And most importantly, certain ways of thinking about money have also changed, slowly but surely.

And that, I think, is the key. Start slow. Pick one thing. Here are some ideas.

If credit card/consumer debt is consuming you, do not incur new debt. period. Just that.  Of course, pay what you can, but don't try and pay it all off in one month or something crazy like that. Just get used to life without incurring consumer debt.

If you're drowning in monthly bills, pick one area per month to focus on. Maybe in January, you try to find a better rate for your cell phone bill. In February, you try to get a lower auto insurance rate. In March, you focus on eating out. And so on.

If you need to save more money, try Afford Anything's one percent challenge. If that's too intense, just up your automatic savings by $5 per pay period. Then, try $10 per pay period.

Again, don't try to do them all at once. Just pick one. After it becomes easy, then move on to something else. 

Seriously, if I can change my mindset, anyone can.

Wishing you a prosperous New Year!


J-Mom said...

The one percent challenge gave me some food for thought. I need to look at my budget. Thank you for the article.

TL Roberts said...

I need to implement some of these debt-fighting ideas. Money is probably my greatest worry.