Life isn’t easy. We all make little and big decisions every day and sometimes it feels like there isn’t a minute that goes by that we can just veg and not have to do any decision making at all. Oh, and by the way, if you actually try to do just that, someone will probably call you out and tell you that you’re shirking your responsibilities or not facing up to reality or must be plain lazy or stupid. Is that why you never avoid making a decision or you agonize over one and never ever take a few minutes to take a deep breath before you do?
When it comes to your money decision making, the pressure is even more ridiculous. Why? Because not only are those decisions important to you, but they show up and stand out. I mean they are pretty visible to the naked eye and often are the main ways that others can see how you function and judge how good your decision making actually is. Even though it sometimes doesn’t show up immediately to the naked eye, your money decisions will eventually be very visible and will affect you, your family, friendships, and even your job. Perhaps you can hide a few bad decisions, at least for a while. But when that day of reckoning arrives, everyone will know what really happened. When that happens, it’s not just bad for you, but for everyone around you and that just sucks!
Money, How You Get It and What You Do with It
Money comes and it goes, right? Some might even say “easy come and easy go”, but I am definitely not one of them. I have never found that earning or getting it was truly easy. In fact, most people have to work pretty hard to get it and even harder to get a lot of it.
The decision about how you’re going to get money starts at a fairly young age. It happens when you first think about what you want to do with your life and think about a career. You may start out at age seven thinking you want to be a firefighter or a doctor, but whatever it is besides the glamor and prestige in it, there’s money attached to it. That’s a big draw and that draw grows and grows right up ’til the day you decide on college or a career and start working. Despite the altruism, you work hard for the money just like that old Donna Summers tune says. That’s when the “managing money” thing gets in your face and it’s also the part that causes most of us to have issues with money. It’s those little and sometimes big decisions that can make our lives way complicated.
Spending That Money!
On the other side of the ledger is spending. Spending is the easy part of money management. Who doesn’t love the feeling of instant gratification?
We all do and we do it with abandon most of the time. I know some of you are minimalists and frugal-minded believers and that is good, as long as it isn’t too extreme. My mother taught me that being extreme, in any way, wasn’t advisable and extreme money management is no different. If you spend the vast majority of your life earning money then you should at least find some time to enjoy it and not agonize over it every non-working second of the day.
You can actually do it either way, but to enjoy it you need to at least to educate yourself about it and try to make the decisions you have to make good ones so you don’t spend more time trying to fix the bad decisions you made before. That’s why you try to learn about your money as early as possible in life and then learn never to repeat the mistakes you make. It isn’t complicated to understand, but it isn’t easy to execute either.
But Saving Money? Sigh
Just the thought of saving money can incite a myriad of thoughts. Thoughts like, “I don’t make enough money to save!” or “I am really bad at saving money.” How about “Saving money sucks.” Or, “Saving? YOLO!” Yeah, I have heard that actually said out loud.
While saving money may be tough, it’s an important part of having a strong financial foundation. According to a recent study about one in four of all Americans owe more on their credit cards than they have in emergency savings.
Life is full of unexpected surprises and having money saved up can help you deal with these occurrences and stay calm, cool, and collected. Without any money saved up? A small thing is suddenly a crisis.
Crises? Many of us know about that stuff and we also hated having to deal with it. It’s one thing when a big problem occurs, an unplanned unforeseen one. But it is completely different when you haven’t even tried to prepare for the unexpected at least financially by saving for that rainy day. Even worse is not preparing for what you know will happen, like say retirement. Not preparing or saving for that is a disaster that will happen to you and possibly your family, too.
It’s Not Just a Crisis That You Should Be Saving for
You can and should also save up for the fun stuff, like that once-in-a-lifetime dream trip you’ve been thinking about or that new set of wheels you’ve been eyeing. But exactly how do you do it? There are many opinions on the “how to” about savings, including things I have written about here. Let me just say there are three basics I strongly recommend to you that will improve your financial decision making and they are pretty simple and straightforward:
They are: automate savings, create a budget, and create savings goals.
Automation is Not Just What Henry Ford Did
If you get a paycheck, you can automate your savings. Prime way #1 is to have money drawn from your weekly paycheck and transferred to an interest bearing account before you even get your little fingers on it. You really can’t miss what you don’t have, and by doing it this way, it’s safe, painless, and rewarding. The big decision here is to find the right place to land your money and to actually sign up to do it!
If you don’t have this option through your employer, then do it through your bank. It’s free and safe. You will be “automatically” better off when you do.
Budgets Create Savings
The most basic rule you can follow when it comes to money is this: know where it comes from and where it goes. That’s what a budget does and shows you. Once you have it all graphed out and visible, you can make the adjustments needed to find the waste and put that towards real savings. You will probably shock yourself if you have never done it and that’s when the good decisions start to win out over the bad or uninformed ones. Check out this link to get started on the “how to” budget phase. And…don‘t forget a line in your budget labeled “Monthly Savings”.
When you budget and you find the things that you have no choice about spending on, like rent, car payments, health insurance (to name just three), you will know where the extra money (discretionary spending) lies. That’s the money that can and should be directed towards your goals. Retirement, vacation, investing, home remodeling, etc.—all can be planned and saved for and should be done exactly that way. You can always tweak your plan (and you should because plans are meant to be reviewed and adjusted), but without a budget and plan how can you ever reach your goal?
Are you burned out from money decision making? Especially when you suck at it? The best ways to deal with the day-to-day decisions about your money are not complex, but are actually fairly simple. If you have don’t have any money, find a way to earn it. If you have some, then you need to protect it and the best way is to make educated decisions and actually have a plan and goals.
It’s also important to take the time to enjoy some of it and not just store it away and make it the reason you are miserable. I love saving money, but I think that it should serve a real purpose and the only way I know that it can do that is with a plan and good decisions. Got a better idea? I don’t think so.