Happy New Year everyone! I hope everybody had a fabulous holiday and that your credit card bills are not the least bit scary this month.
Before I get into today’s post, let’s have a bit of a fireside chat, because it’s been a while and I’ve missed the blog community!
I’ve been on a bit of an unplanned hiatus because I caught the flu then bronchitis and I’ve basically looked and felt like this for the last month:
Since this is a personal finance blog, and not WebMD, I’m mentioning this because being under the weather for such a big chunk of time (relative to my usual 2 days of a cold per year) changed the way my finances looked for the month of December and made me so grateful for my “things I didn’t budget for” line.
Things like cough medicine, prescriptions, humidifiers, and extra heating costs for the days I was home sick all added up.
I was covered, because I have a budget category for random, unplanned things, but let this once again be my vote in support of some kind of “miscellaneous” budget category for little things like this. It wasn’t worth hitting my emergency savings, but it did push my spending up – something I didn’t think about.
As if being a zombie for weeks on end isn’t enough.
BUT I am on the mend and back to the blog and I am so excited to be writing in the New Year!
Ok, so, you’ve seen lots of posts in the last few weeks about New Year’s Resolutions. I am a big, big fan of New Year’s resolutions, which I know is kinda out of character for someone who is pretty vocal about hating goals.
It’s a pretty basic explanation though.
I love resolutions because I am selfish and I love thinking about things I *want* in life.
And you roll your eyes and go “ugh… millennials”.
BUT IT WORKS.
“I want to have a magazine-worthy house any time a guest drops by unexpectedly so they basically think I’m Martha Stewart” translates to “I will get off my butt more, be more organized and set up a cleaning schedule.”
“I want to go on a kickass vacation this year” translates to “I need to increase my automated savings into my travel account and also stop eating so many donuts, because beach.”
I mean, I’m basically tricking myself into setting goals.
But if you’re not a goal-oriented person either, THERE IS HOPE FOR US.
And it’s not just at New Year’s.
Anytime you feel like you’re losing sight of your savings strategy, or on those days that you splurged and you feel crappy, and you need some motivation to get back on track, think about this:
What do you want to do with your money?
Like reeeeally think about it. It seems like a simple question but it might not have a simple answer.
A few weeks before Christmas, my husband and I were talking about our parents and their retirement plans. (Okay, I was talking about retirement and my husband was half-paying attention.)
This was an especially important conversation because my husband and I were raised by sets of parents who have very different ideas when it comes to money management. Neither one is more right or more wrong, but because they are different, my husband and I were naturally taught to prioritize different things.
We don’t speak the same savings language, so instead of talking about goals and plans and investment strategies, we talk about what we want and build our savings plan off of those wants.
It started with:
We want to do something different with our money than what our parents did.
It turned into:
We save because we want to live our lives reasonably, but without restrictions.
We save because we want to retire by 55 and maintain (or enhance) our lifestyles once in retirement.
We save because we want to be prepared in case of an emergency.
We save because we want to travel widely and often.
We save because we want a dog that we can spoil like a human child.
We save because it gives us peace of mind that we are in control of our lives and our futures.
Then it became:
We need to increase the growth potential of our long-term investments, and we need to set up a few new short term savings accounts.
It’s an easy conversation, because you’re basically just day dreaming about all the cool things you want out of life.
Then, the harder – but very worthwhile – part is coming up with numbers to attach to those wants, and setting up the savings plan to achieve them.
For me, it’s a very easy automated savings program, transferring money into each of my “want” accounts. The longer-term wants get the higher return investment accounts, the shorter-term wants get the high interest savings accounts.
And that’s it.
It also helps with motivation against splurging on useless things.
I have a clear idea of what I want to do with my money, so why delay my super awesome vacation by spending that money on things that aren’t as valuable to me?
Fool proof, I’m tellin ya.
As I’m writing this, I have to tell you, I sort of see the millennial characteristics coming out… wanting everything and making technology do all the work to get it is a kind of a fundamentally selfish and lazy approach on the face of it.
But at the end of the day, my selfish, lazy approach is motivating me to hustle harder and get the most out of my time and money, so I’m calling it a point for the millennial stereotype.
So today, if you haven’t already, seriously consider what do you want your money to do for you? What are you saving for this year?