I’ve mentioned a few times that one of my New Years Resolutions is that of FRUGALITY.  But the core of the desire to spend less is to finally be able to afford my life.  For the longest time I’ve been either living just barely within my means or well outside these invisible boundaries.  What this does is keep me stressed about and focused on money, and distracted from the more important things in life.  Even my blogging has suffered as I struggle to focus on my posting while trying to shew away that annoying financial ‘fly’ that keeps buzzing around my head.  All I’ve got to say is, “This has GOT to stop!”

How I got here.

So how exactly did I get to this place of being broke all the time?  I mean, don’t I often times see thousands of dollars in my bank account?  Well, this may be true, but it’s more a mirage than anything else.  As a computer consultant I would go through times of flourishing and times of floundering.  When things were going well I would naturally adjust myself to the extra cash and find myself making those purchases that had been put on the back burner.  Then when things got slow again, panic set in as I started to yearn for the money I had foolishly spent.

There are two causes to this cyclic financial syndrome that I want to talk about today.

1. Keeping a dynamic budget that is constantly in flux. When you have more money, you spend more money.  When you’re broke, you stop spending.  (You could say this is not having a budget at all.)
2. Having a selective memory. When money is tight I can only think of the time that I no longer have.  Because there’s nothing there to spend, there are no thoughts of spending.  So the only thing left to gain is time.  These are the moments when I realize the true value of this finite recourse.  (I’ll go into this with greater depth, later.)

The ‘no budget’ budget.

Do any of you guys have a ‘no budget’ budget?  You know, the kind where you spend your money based on your feelings?  Well this is something I’ve used over the years and have found it to be a wonderful way to keep things tight and interesting.  None of that boring financial freedom crap.  Nope, we’re talking good old fashioned, keep up with the Jone’s kind of dynamic budget that never let’s you breathe.  Aahh!  That hits the spot…

OK, not really, right?!  That absolutely SUCKS!!!  I’m sick and tired of living a life of ‘feast or famine’.  Liz will ask me something like, “Can we afford to go out to dinner tonight?” and my answer is always either a stressed out, “No.” or a relaxed, confident, “Absolutely!”  It’s as if the good months become a sort of aphrodisiac, and lull me into a false confidence, only to be woken from my stupor when the well quickly runs dry.  Then, when things are tight, I wonder what the heck happened to all of our money?!

Mixing up the value of time and money.

It always amazes me how quickly I forget how valuable time really is.  It’s like solid gold compared to dirt when you put it’s value up to the ever changing dollar.  Yet when my bank account gets its fill of that green monster I find that I’m taken by a kind of selective amnesia.  Suddenly I forget about time’s finite properties and see money as this great prize to bestow all my attention.  Images of all that I can purchase edge out those pictures of time with the family, enjoying the sunshine of an autumn afternoon.  All the THINGS that I had been pushing aside so we could afford the basic necessities were suddenly pushing to the forefront of my every thought.  Then I stay true to my ‘no budget’ budget by expanding our spending and guaranteeing more future stress over this finite object that’s deceived me once more.  (Not really.  I let myself be deceived.  Maybe I even wanted to be.)

The REAL prize.

Time is the real prize we should all be after.  All these movies that show money as the ultimate treasure should replace that false idea with time instead.  Yet, in a sense they do.  You’ve heard the phrase, “Time is money?”  Well it should be, “Money is time.”  Most of us are after money because we know it will allow us more time.  It’s not the sports car, but the ability to work less and enjoy our families more that drives us to seek the ‘green’.  But we have a tendency to sabotage this concept by spending more of our money on objects and less time with our family.

Every year during the holidays I am reminded how much more I value this precious time over money.  Because it’s during this time that I often stress over the slowness of business, the expense of presents and the minute amount of time I spend with my family and friends.  But fill up my bank account with a little extra, let me breathe a little and regain my confidence in paying the bills and I’m overtaken by this monetary amnesia once again.

How to stop the madness.

Let me start by stating that much of this post is purely pointed at me.  If you happen to relate, wonderful.  If not, then you’ll just be learning more about the guy behind this blog.  And this ‘how to’ I’m about to share is more a plan that I intend to implement, not something I’ve proven as fact.  So keep this in mind as I take a shot at regaining my financial freedom.  I hope you can take away some helpful ideas, but know that you may be well ahead of me in this area and therefore see this as pure common sense.

I think the biggest adjustment to begin with is to stop the financial amnesia. To somehow maintain the mindset that time is the prize, not money or objects.  This is SO EASY to remember when money is tight because we have no money to spend, but the same amount of time that we always have.  Bring money back into the situation and spending once again becomes an option.  See, the amount of time never changes.  But let’s pretend that it did, for a moment.

Let’s say one month you had 24 hours every day and plenty of money in the bank.  Everything felt fine.  But then, the following month, you suddenly have 18 hours a day.  Your money hasn’t changed, but your time has lessened.  What are you going to begin thinking about?  Your time, of course.  See, whatever fluctuates gets your attention.  The squeaky wheel gets the grease.  Time has a hard time squeaking because it’s a finite recourse.  If money were finite, it would lose much of it’s attention getting attributes.  So we need to do this ourselves.  Take away money’s ‘squeakiness’ and give time it’s due attention.

So how do we do this?  How do we make sure that time gets it’s rightful attention while removing the spotlight that seems to always pour itself onto our finances?

• BUDGET!!! This six letter word that many of us never truly understand.  Having a budget is never having to ponder the question, “Can we afford to go out to dinner tonight?”  A budget is a device that takes the decision of spending money away from the human and therefore maintains it’s consistency.  A budget never gets overly confident or enticed by an advertisement.  A budget always knows how much money is going in and how much will go out.  If we don’t have a budget we will never have consistent piece of mind in regard to our finances.
• Make the most of your time. Just as important as a budget, treating time with the respect it deserves will help you never forget it’s true value.  When we spend our spare time with family and friends and/or doing things that promote good health and deep enjoyment, we will always remember the great gift we have in our time.  I find that it’s when I’m being lazy, not spending my time wisely that it’s place in my mind dwindles.  Just think of that phrase, “spend my time”.  We are spending our time, just like money, when we use it up.  Of course, the difference between time and money is that with money there is a choice to spend.  Time, not so much.  Whether we like it or not, we are always spending our time.  So having a kind of ‘time budget’ is crucial if we want to ensure our daily time investment is being spent wisely.

So what about making money?

I think one of the greatest frustrations we all have when trying to enjoy our time is the fact that we still NEED to make money.  The trap we tend to fall for, though, is focusing ALL our attention on this task.  There may be a few of us who truly do need their full attention on their money making attempts, but for the rest of us, we need to adjust our spending to our money making capabilities and not the other way around.  I’m not saying we should stop trying to further our income potential, just that we tend to do things backwards in this area.

I’ve always been the type to spend first and ask questions later.  I always make sure that the money is there, I’m just not usually thinking about whether it needs to be there down the road.  I have a tendency to try and make enough money to meet the requirements of my spending habits, when it should always be the other way around.  We can only make the money we can make.  We are limited by our experience and current situation.  (And don’t think for a second I am advocating we can’t make MORE money and expand our careers, just not at this very second.)  So it is absolutely crucial that we adjust our spending according to our income.  Once again, not rocket science, but a commonly missed concept, none the less.

So what are we making right now?  $1,000/month?  $5,000/months?  $10,000/month?  Whatever it is, does it FULLY cover (and then some) your current spending habits and financial needs?  And not just for this month, but for every month for years down the road?  Are you taking into account the unforeseen expenses and emergencies?

If your income is not fully covering your expenses and/or you are in dept in such a way that you’re not paying it off quickly, you need to make some serious adjustments and do it RIGHT NOW!  I know this is harder than it sounds because of some non-flexible expenses like our mortgage.  But this is where we’ve got to get creative.  The degree of change is up to you and no one is holding you back.  We can either slowly sink to the bottom or go through the growing pains of financial freedom, right now.

My up-coming journey.

Beginning today I am going to be making some serious changes that will cause some initial discomfort, but allow for future freedom.  Please join me on this journey if you are one who struggles like me.  It should be a time of growth, excitement and pain.  But I’m so sick of living my life, ‘paycheck to paycheck’ that I’m ready to jump right in.  I would love for any insight from those who are further along on this road.  And for any who lag behind, I offer a helping hand as well.  This won’t become an overshadowing topic on “Motivate Thyself”, but will be a new theme of sorts.  So I look forward to the road ahead and hope to share some common ground with many of you.  Financial freedom has eluded me too many times and I’m done foolishly chasing my tail.