Well this is #BLOG 17. My previous BLOGS have been about creating a circle of good friends, good habits, not burning out, living from the heart and so on, blah blah blah, ect! So perhaps I have already answered this question about money for you, having put these things forward first for thought and discussion? Well in many ways I do agree that money isn’t everything. If I was a multi-millionaire with no family or friends or connections, I think I would be very sad, but hey perhaps I could just buy them? You are being very silly – I hear you all say! You already know the answer to this question, yes money isn’t everything, but it is impossible for us to live without it. Research (Harvard Business Review) has proven that having a big stash of cash is unlikely to make us happier anyway (I would be happy to put this to the test!). It is also very very unlikely that most of us will ever have a huge mega stash of it! So where are you going you all ask? Money is a necessary thing that we have to earn and spend. We need to make sure we have enough for essential things, be able to live a little, and also put some aside for a rainy day (like COVID 19!). At the same time, it is not healthy to be consumed with it. Make money work for you! Not have it be you always work for money…..
In truth, money didn’t make me happy for a long time, say 7 to 10 years! It wasn’t everything but it kept being everything…….. I felt like I was on a merry go round just handing out money. More money was going out than was ever coming in. I had a panic attack even thinking about going to the letter box. My credit cards were constantly maxed out. I was simply moving money from one place to another, robbing Peter to pay Paul to keep the merry go round turning. I seemed to work harder and harder, multiple jobs and longer and longer hours to feed this machine. Unfortunately, as time went on the me machine – my mind, body and soul came crashing down. I hated money. I felt hopeless. Everything seemed pointless. Arriving at ground zero was the best thing that happened. I have since developed a healthy respect and relationship with money. It isn’t everything but it is essential. Here are some of the things I did to reach this sweet spot:
>Reduce your amount of debt – property / mortgage and credit cards. I sold my property and downsized, as well as reduced my credit card limit significantly. I now only use my credit card in essential circumstances.
>Reduce your expenditure on “wants” – simplify life and have less “things”. Often the buzz you get from having new “things” is short lived anyway, before you start thinking about the next new “thing”!
>Recycle and reuse -consider buying 2nd hand items if possible. I have recently moved into a new house. I purchased only a couple of additional furniture items, and they were quality pieces from a “buy/swap/sell” site. Even my dishwasher is 2nd hand. Instead of spending $1000, I spent $100 on a 2nd hand Miele. So far so good!
>Know how much money you need to live – I sat down and did an entire annual budget for my family to see what our cost of living actually was versus the income that was coming in from various sources. This was a real eye opener. It was both a positive and mind-blowing experience. Positive in that I saw ways I could trim down on expenses without too much effort or even any real hardship. Mind blowing in that it revealed where all my money was going to, both for essential expenses but also areas of “want”. Also, because the cost of running a family of 5 adults is a bloody expensive exercise. Love my family and all! Information was definitely power for me following the process of doing my budget.
>Revaluate what “living” means – wants vs needs. Understand the difference.
>Know how much money you actually earn – net income – after tax.
>Reduce the gap between the cost of living and how much you earn – I reduced our food bill by meal planning and only shopping once a week. I buy non-perishable foods on special in multiple quantities to save money in the long term. I changed our mobile phone service provider and internet service provider and halved my monthly bill. Instead of turning up the heating, I put on a jumper.
>Share the load – my partner refused to engage in any financial conversations, decisions or actions that were required during my “unhappy” money time. Yes, he bought in some of the bacon, but this alone was not enough. There has to be a shared understanding, commitment and involvement of all people in a partnership around money and your personal financial situation.
>Go back to the beginning! – it is never too late to start again. In fact, this really can be your best option! For me this presented many opportunities to make things even better. Life itself. My values, outlook, goals, health – everything. All was not lost.
>Pay your bills as you go – so you know how much “extra” money you really have or not!
>Adult children pay their own way – I have 2 adult children who now pay for their own mobile phone bills, car insurance and registration, and they cook a meal each once a week for which they have to buy all of the ingredients. This is giving them life skills and a greater appreciation of money and the cost of living. If your adult children are working, charging them weekly board is also an option.
>Put away the money that is already committed to living expenses – so you don’t consider it as money that can be spent on “other” things, leaving you short and stressed later on.
>Value health and financial freedom – more than status, looking good and things!
>Save for a rainy day – even small amounts add up over time.
>Have a short and long term view – by this I mean pay for things in the short term, but understand saving can sometimes require a longer-term view and takes time. Set yourself realistic saving goals.
Happy making money work for you!
Written from my heart for yours. Be kind to yourselves.
Iris May 27th October 2020
Be Kind to Yourselves - BK2Y 