“Money is nothing more than a reflection of your creativity, your capacity to focus, and your ability to add value and receive back.” ~ Tony Robbins, MONEY Master the Game: 7 Simple Steps to Financial Freedom
Last week, we wrapped up Pillar #9 of “The Year of the Best You” – Manage Your Time. Today, we will start on Pillar #10 – Minimize Your Expenses. As before, we will discuss this pillar a bit more below, provide a printable PDF worksheet for the month and then recap how we made out on October 29th.
When it comes to personal finances, I don’t think I am alone in the feeling that it is easier to bury your head in ignorance/fear than to face them head on. I also think it is tempting to demonize our financial situation and make money seem bad, or associate it with negative connotations such as either “greed” or “not enough”. It is well known that money can’t buy happiness, that is above a certain level once basic necessities are met and some added comforts of life are covered.
If we reframe our thought process and look upon money with gratitude, money can be positive and not one of those topics that no one ever wants to discuss. In order to feel grateful, we need to change a scarcity mindset into an abundance mindset. After having significant medical training debt follow my husband Colin and I around for many years, I have tried to change my mindset around money. The fact is, have I ever truly done without ? No, I sure haven’t.
The LAWS of minimizing your expenses
This past week, I was listening to a podcast from The Ultimate Health Podcast where coincidentally the guest, Pedram Shojai was talking about the importance of “time”, but as part of it, wove in some financial truths. He sounded a lot like my husband Colin so I thought I would pre-order his new book (see below) given their alikeness in thinking. Some of his lessons also reminded me of Stephen Covey, who I often reference given the timeless lasting impact of his work.
Combining some of Colin’s and Pedram’s wisdom leads to what I refer to as the LAWS of minimizing our expenses:
Live within your means – this is a tough one for sure, given it is so multifactorial. In today’s world, we are surrounded by the ability to purchase with a click – literally one click on Amazon. We also need to take into consideration that our means of today may not be our means of tomorrow. Although we may have a comfortable salary that guides our spending right now, what would happen if we either lost our job or couldn’t work because of an injury? Such scenarios should make us take a long hard look at our income versus expenses to ensure that we are living within our means.
Awareness – Facing, not just knowing, and scrutinizing your expenses is the only truly way to minimize them. If we don’t keep a tally of our expenses versus income, or a budget, many of us won’t realize the larger hole we are digging for ourselves. Colin often says that teaching our kids awareness of the cost and value of things will only serve them in the future. I must say that I have really started to notice how well this basic concept has stuck. A budget is a great way to remain aware and can be as simple as a tally on a phone for kids.
Wants versus needs – this is literally one of Colin’s mantras. I am sure he is not the only person who tries to live by it, and in fact, Pedram mentioned it on the podcast. This also ties into the concept of minimalism – only surrounding ourselves with things that we truly need or that give us joy. Although we may not need that nice bottle of wine or that latte, these things fall in the joy category. Next time, before clicking the purchase button or buying something at the store, ask yourself “is this a want or a need?”.
Spend consciously – Pedram touched on this in the podcast and it is definitely something that our family has been really focusing on since our recent move to British Columbia. It is an added sense of awareness of the items we are spending our money on each given day, and recognizing that we may need to spend a bit more if it means we can buy locally and responsibly (i.e. not developed/made where no labour laws exist). I feel so fortunate to live in a place where local products are so readily available.
This month’s worksheet will apply the LAWS discussed above. Over the long term, the benefits would and will become more obvious. Please print off the worksheet to join in this month’s activity. I will do the same and we will recap on October 29th.
Her Money Podcast – Jean Chatzky (I love it – covers so much more than finances)
Budget Worksheet – Jean Chatzky
The Art of Stopping Time: Practical Mindfulness for Busy People – Pedram Shojai