Each morning I make a list (actually I make two – one for work, and one for home) of what I need to do for the day. I list most things and the more important tasks are noted in capital letters. It's a manual process and the list is always in my line of vision. It helps me focus and there is something satisfying about crossing off each item.
Many years ago I mentioned to a friend of mine that I wanted to start investing. I knew he had a background in such things and would be the person to help get me started. Instead of giving me his top tips or any personal advice, he gave me a link to a web address that, in his words, "Would help make investing easy".
That web address took me to a 13 Step process – I don't know if he knew then how much this one page would stay in my mind. A list of guidelines that would help me change my spending habits, pay off the credit card, save enough to cover my fixed expenses for a reasonable amount of time in the event of emergency and path the way to having some left over to invest. He gave me the foundation of getting started. And just like that, a new list was printed off and put on my whiteboard, in my line of vision.
With every new list I create, the process is the same. Cross off each item, in order, until the list is complete.
Steps 1 and 2 were easy ones. I read a little bit of theory that quickly lulled me into a false sense of "I'm going to get through this no worries".
And then I read the words Step 3 "Get Control Of Your Money" and knew this is where I was going to come unstuck.
Seriously what self-confessed shopper wants to read the words "Get Control Of Your Money"?
All of a sudden there was a practical application that I needed to be accountable for?
They were five little words that caused me to reassess — and continually reassess — my (and my family's) everyday habits: I buy a coffee and bring my lunch, I changed mobile phone carriers, I updated our insurance, I buy less on impulse and more on sale. I buy less! As a family, we've changed our lifestyle – we do less "paid entertainment" and more "free activities". It's not only been positive for our financial situation but also our family unit.
It's important to note that since I started this little journey there have been times I (and the family) have well and truly fallen off the savings horse. The trick was to acknowledge it and get right back on. I didn't beat myself up about it, I just went back to my desk, looked at my wall and reset my priorities.
Step 4 said to "Dump My Debt". Done – check and flick! The first time my credit card hit a zero balance I celebrated by buying a new handbag – talk about falling off the horse! I looked at my list and reset (and I did end up returning the bag). My mother laughs at how much I use my credit card (who carries cash?) but she still goes into the bank to withdraw cash. The resetting happens each and every month – it's the first thing I do when I am paid. I cannot stress how much satisfaction I get seeing the balance outstanding at $0 each payday.
Withdrawing cash from the bank is a habit that our generation got out of, and as a result, most of us are in debt. These days, I use my credit card for convenience, but I don't carry a balance. The best of both worlds!
Now I am in saving mode and preparing for Investing Take Off (Step 5). My funds are accumulating and there has been a definite shift in my spending habits. We still go out, we still spend a small fortune on extra-curricular activities. The difference is that without the conversation with my friend, I would probably still be stuck on Step 3.
And as for the checklist on my board – it's a constant work in progress. I have come to realise this is one list that isn't going to be be checked off. Instead of putting a big line through "Step 3 "Get Control Of Your Money", I have highlighted and put a box around it. It helps keeps me focused.