“Annual income twenty pounds; annual expenditure nineteen, six and six; result happiness”, says Mr. Micawber in Charles Dickens’ David Copperfield, “Annual income twenty pounds; annual expenditure twenty pounds, ought and six; result misery.”
Everyone knows that just as in dieting where we must eat fewer calories than we burn, in finances we must spend less than we earn. It’s very easy to say, not always so easy to do! The key? Commitment! In order to succeed, to really change your life, you must make a commitment to the process. You must commit to keeping on track and sticking with it until you get where you want to be.
So, you’ve decided that you want to take control of your financial life. Now what? Make a plan for how you’re going to live on less than you earn. If you want to succeed, focus on making a plan that allows you to live well on less than you earn. If your plan leaves you struggling to survive, struggling to find some tiny bit of joy in your life of doing without, you are setting yourself up for failure. To use the diet analogy again, if you ate nothing but carrot sticks and rice cakes all day you would definitely lose weight but how long could you keep that up? No matter how sincere the commitment, I doubt any of us could stay on that diet for long!
In the same way that an overly strict diet will practically guarantee failure, an overly restrictive spending plan will make it very difficult to stay on track and succeed. Be realistic about what you are able to do without. Can’t give up satellite television completely? How about downsizing? Going from the unlimited package to one hundred channels might be doable. Can’t give up going out to eat altogether? How about restricting yourself to once a week or twice a month? Can you live with that? If you currently eat out several times a week, think how much you’ll save by making that adjustment.
Depending on the size of your current financial disaster, you may have to stick with this plan for quite a while so you need to be able to live with it. Once you’ve got things under control, you’ll need to stay on a financial “maintenance” diet forever so keep that in mind when you are slashing through your expenditures. You are trying to craft a new lifestyle so be sure yours is realistic.
When you are building your new budget, be sure you include a little fun but be thoughtful in how you do it. Finance a date night with your special someone but instead of dinner in an upscale restaurant and tickets to a show, how about a picnic and a walk along the river? Not your style? How about a museum and a poetry reading? Still want that fancy meal out? How about lunch instead of dinner? A matinee instead of the main show? Find a way to adapt what you like to do. Give it some thought. There is usually a less expensive alternative.
The secret to honoring your commitment is making your plan something you can live with. If you build in rewards for meeting your goals, make sure you don’t go overboard. In the same way you wouldn’t reward yourself with a chocolate cake for every pound you lose, don’t throw away a week’s spending cuts on a big Saturday blowout.
Commitment is the key to success but you will need to be realistic and flexible in order to stay on track. You will also need to be forgiving. If you fall off the wagon, dust yourself off and get back on. For most people, really making a change in our financial lifestyle is a “two steps forward, one step back” process. If you give up the first time you get off course, you will never succeed.
Take a good hard look at your financial life and, if you are not happy with where you are, make a commitment to change. Be realistic, be flexible, be forgiving and you will be successful!
SimplyForties is a 47-year old single mother of a college-aged son who is navigating her way through midlife and documenting it at http://www.simplyforties.com, where she writes about personal finance, relationships, grown children, the environment and social responsibility. She lives in a small rural town in far west Texas where she tries to live a better life every day.