Its Thanksgiving weekend in the U.S and so its time for the obligatory “What I’m Thankful For” Post. I’ve never been one to shirk my duties;) I think most people would call me very conscientious so here goes!
As much as I am making light of the topic, there really is a LOT to be thankful for. When you don’t have a lot of money sometimes it can feel like that really overtakes your life. It affects every decision and every thing you do. This is especially true if you are particularly conscientious;) or are trying hard to focus on finances. When you are sticking to a budget it can seem that everything you do is dictated by how much money you do or don’t have and its hard not get resentful. But really there is so much to be thankful for in my life. I don’t usually get sappy and I try not to sugar-coat reality in my blog posts but I am really extremely privileged and lucky. Continue reading “The Obligatory Thanksgiving Post”→
Many people get a large or small bonus around this time of year. Its super tempting to go and spend it all on something fun or even something you think you “need”. Especially when its a performance-based bonus its easy to convince yourself that you “deserve” to spend all of it on something really fun or frivolous.
But, you know what you really deserve? The biggest gift you can give yourself and your family?
Financial freedom and security.
Plan Ahead for Maximum Responsibility
BEFORE you get a bonus or other large amounts of “extra money” is the best time to decide where it should go to make the most meaningful impact on your finances. Large amounts can make the biggest dents in any debt or savings goal and has the added bonus (get it?) of making you feel like your making real progress. Small amounts DO add up but its much harder to see the progress.
Are you one of the lucky few to get a holiday bonus this year? Fingers crossed that I get one this year!
So… what to do with that extra cash?
Here is what I suggest:
If you have a lot of debt then the best thing to do is to put it towards that. Large amounts can really move the needle on your debt repayment plan and will lower your overall interest paid pretty significantly. Put it all towards one of your bills. You can put it towards the debt with the highest-interest rate or you can follow the Snowball Plan and put towards the smallest debt you have. But whichever debt you decided to pay off- put it there! Even if you are not in a strict paying off debt mode- paying off debt is one of the best ways to free up money and reach financial security and freedom.
If you don’t have any debt (good for you!) then you have some options (isn’t it great to have choices!?)
First of all, take off 10% and put it towards charity. I always make charity a priority in my life. I have a few organizations that I like to give too and I also give to individuals who I personally know are struggling.
If you have tried these and they work for you then great!
But here is why I advise NOT to do a spending diet.
Using Motivation To Help You Change
We like to think that making big, bold moves will help us. We like to imagine ourselves doing a complete overhaul of our lives within days. TODAY I will change. TODAY I will become the person I want to be. I will become more organized, on top of my finances, more mindful, a better person etc. We want to be all those things and we WANT IT NOW! We usually feel like this after a particularly motivating experience. A motivating experience can either be something positive or negative that convinces us that we must change our behavior. The problem with motivational experiences is that they give us a temporary “high”. We get all gung-ho to change and improve but then the high wears off, we face an obstacle, we fail at what we are doing and we give up.
Motivation is temporary. As Zig Ziglar so famously said, “People often say that motivation doesn’t last. Well, neither does bathing-that’s why we recommend it daily”. Its a good quote and true on many levels. The problem is that unlike bathing we can’t just jump in the shower every time we need a good dose of motivation. It has to come from somewhere and sometimes even our trusty sources of motivation let us down.
Motivation is like a shower that only works sometimes, when we least expect it and sometimes the water is cold and sometimes the water doesn’t come at all- even if we are standing and screaming at the shower head. So the metaphor doesn’t totally track but the point is that motivation wear off and then you are left with what exactly? The high is gone, the purpose is gone-we are only left with the actions that we have taken so far.