Wake Up And Make A Financial Plan

October 19, 2018

Certain childhood memories are remarkably vivid. Like, calling to order pizza from Stageline Pizza and using the script I’d carefully written down because I was terrified to place the call in the first place. Riding bikes on a worn-smooth gravel road in the warmth of a Montana Spring day. Mom waking us up by tickling our feet (it was and is still impossible to be mad at her). It must have been an inherited idea since her dad, “Grandpa Tumbleweed”, would occasionally wake us up during visits to their South Dakota home with ice cubes. He was often up at the crack of dawn to get a round of golf in and was anxious for his grandkids to wake up so he could tease them:) While neither of these methods of insta-rousing was very pleasant, they sure were effective!

Anyway, this blog post is or can be your wake-up call. One of them.

Most Americans live in a pretty tenuous financial picture. Statistics like these provide some pretty amazing color about the average debt carried, spending habits, lack of retirement, etc. Other sites provide some average spending habits and summarize studies on how we spend differently when we use credit cards.

The statistics referenced on the sites above are real and they don’t just describe other people. They might be describing you. I talk to quite a few people about budgeting because, ya know, I like it a ton, and am surprised by the number of people who are okay with their current situation and don’t think they really have a problem. They’re okay with it even if their financial life (which equals real life) involves debt, some uncontrolled spending, and even more financial uncertainty about their financial picture that they admit. Having spent some (or a lot of) time in that camp I can relate and am certainly not judging you!

In fact, because I spent a long time in that camp, I know that you do a pretty good job of that yourself. The goal is to get those emotions from deep inside where they just fester and provide you with warm, cozy guilt and worry feelings of being “bad with money,” undisciplined, incapable of making a change or really having your financial (real) life be different. And start putting stuff on paper and getting excited about doing this differently so you can get what you want! My feelings of stress and guilt about my spending habits and financial picture were eliminated almost overnight when I decided to do something about them; here are just some of the awesome feelings and happenings that are ahead of you if are willing to CH-CH-CH-change. Wahoo for change!

Okay, getting back on track to the point of this post. You know that I listen to Dave Ramsey and one of his favorite points of discussion is “making a plan”. This sounds so simple but you guys, it’s not, or we’d all be doing it. My financial life (and thus real life – yes, I know I keep belaboring this*) changed when I got on a plan. When I went to college I wasn’t on a financial plan – much to my parents’ chagrin and despite their teachings. When I graduated and was looking for a job I again was not on a clear, mapped-out plan of how I would actually afford/achieve my lifestyle and goals. I also wasn’t on a plan when I went to web development boot camp. That ended up being a great investment but it just as easily could have been a dumb one since I wasn’t armed with a map or compass for paying it off and capitalizing on it. My previous “hope is a strategy” mentality didn’t land me homeless in the gutter or anything but it has limited (until now: watch out World!) my growth opportunities – where I could live, what jobs I needed to take, what service opportunities I could be involved in, etc.

So, the plan. When Dave or other smart people for that matter talks about A PLAN he’s really talking about putting numbers on paper and sacrificing in advance for what you want to achieve. Had I done that years ago for web dev boot camp it might’ve looked a little something like below (using ballpark numbers, not that I remember all of them specifically anyway and talking in present-past tense if that’s a thing:)):

———

White-boarding a hypothetical approach to a past decision:

Cost of boot camp: $7,200

Cost of living expenses for those 3 months: $1,300 x 3 = $3,900

Total cash needed: ~$11,100

By sacrificing some luxuries now how much can I pile up per month toward this? $1,000

What extra work could expedite this path? At the time I could’ve considered nannying, weekend housecleaning, delivering pizza, driving Uber (or maybe that wasn’t in Utah yet?) or doing some freelance editing…you get the idea…something…anything extra that paid money, didn’t compromise my standards, or land me in jail. $800/mo

At the rate described above, I could have had enough to pay cash for the program and living expenses in less than 6.5 months. But in the rosy age of instant gratification, it was easier to just dive in headlong to the shallow end of the pool (go into further debt for it to start immediately versus sacrificing and planning a bit) and hope that I wouldn’t hit my head on the bottom (ruin my financial and thus real life for years to come).

End of white-boarding. Thank you.

There are other, smaller things that we impulsively buy without a plan. New furniture, new clothes, vacations, expensive meals out, excessive meals out, new tech toys. The really bummer thing is that those purchases bought without a plan are the minions or termites that subtly or less subtly undermine the dreams you have for your life: bigger house with more space for your family, sending kids to a better school, living with financial peace, saving up for a down payment on a house, blessing others with your time and means. The really COOL thing about having a plan for your spending (AKA a budget) is that you can have BOTH. You can have the new furniture and new clothes AND a bigger home for your family or the trip to Ireland AND the reliable car, if you’ll only plan.

So, here’s your ice-cube, wake-up challenge: decide what you want (strongly encourage debt-free to be on that list), make a plan – on paper – and be all in. Yes, you might slip and fall along the way but when you have a plan you have a much clearer course to get back on. And you will! Budgeting is just organizing your money in accordance with what you want for you and your family’s future. So what do you want for that? Huh? HUH? I am excited to see what you can do! If you need a boost of encouragement or someone to vent to or practical help along the way, I’m your girl! Shoot me an email anytime! And, if you ever want to ride bikes and know a great worn-smooth gravel road, for Heaven’s sake please invite me.

*Life is not about money but a whole lot more life is possible when you are living financially well and within your means versus stressing about how stretched thin financially you are.