Tuesday, March 24, 2009

Getting started is half the battle

When discussing my financial situation, I approach it in a slow and steady fashion. That is, create a spending plan, account for every penny, spend less than I earn, set goals for savings and fund these goals automatically. This is not a fancy method and you will not get rich quickly. However, years of living this way have given me a CD ladder, several savings accounts with specific goals in mind, enough money to cover all monthly, semi-annually or irregular bills, and a retirement fund however depleted with the current market in a downward trend.

How did I get here? I eliminated all credit card debt, paid my student loan and car loan in full, kept my car for years after being paid off, bought a home well within my budget and chose a 30-year fixed-rate mortgage. This is boring to discuss, but again, no fancy methods, money manipulations or lifestyle envy. I made consistent, automatic contributions to my retirement funds and savings accounts. I paid all my bills on time missing only a few times in ten years. And I strictly followed a spending plan, ensuring I could spend without raiding my savings accounts.

Why am I telling you this? Because looking at where I am now, it all seems easy. However, getting started took some false starts and overcoming inertia. I got along just fine without automatic transfers from my checking account into my savings account. I did not save as much as I wanted, but I did not spend more than I earned. Then I made a commitment to buy a house, something that requires maintenance or replacement of items. And I had to make a downpayment on said house. Suddenly, letting money slip through my fingers just because I could spend it seemed like a poor plan. At this point, I decided to change my saving habits to include more strict adherence to my spending plan and removing "savings" as an item in my spending plan. Instead, I just starting setting up an automatic transfer from checking to savings.

Wow! That automatic transfer was a revelation! Suddenly, my savings account was growing faster than I could imagine and having a greater cushion for unexpected expenses seemed within reach. But to get started, I needed to do two things: 1) change my thinking and 2) do something about it. Both of these are easier to write or say than do. For example, I know that I have too much stuff in my house--too much clothing, too many books, CDs and DVDs, more stuff than I need in my day-to-day living. I know I need to sort through it and determine what stays and what goes. But it is easier to say "Oh, I need to do that" than to actually get off the sofa and do it. I have the best intentions, but still, nothing gets done.

However, when I do sort through it all (and I will!), having all that space back, having fewer items to clean or dust or maintain will give me more control over my life, lessen my burden and mean fewer things to pack and move in the future. I have learned my lesson with my finances but have yet to apply it to all parts of my life. I know I need to work on my health goals and sheer amount of stuff I live with. Progress always comes slowly so I will remind you do not look at what you have not done (e.g., the dishes); look at what you have accomplished (e.g., expanding the garden for the growing season). The positive feeling will help carry you through the challenges of getting started on that next project that seems insurmountable.

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