Finance Globe

U.S. financial and economic topics from several finance writers.
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NDYL, Part 5B: Relapse Recovery (Yes, Virginia, there is a way to make it happen, even at Christmastime)

“The best laid plans of mice and men oft go astray.” True dat, Robert Burns. True dat. I don’t know anything about Mr. Burns, the poet who penned those wise words, but I suspect he must have had children. If all had gone according to plan I would have finished this half of the “Relapse Recovery” column weeks ago and the holiday shopping tips I was going to share would still have relevance for most of you. Evidently, that was not meant to be. Illness and bad weather early this month left me with no childcare on multiple occasions, seriously curtailing my writing time. If you’ve ever tried to get any significant work done with a young and very active toddler in the room you know what I mean. Especially when that toddler simply cannot resist pushing Mommy’s buttons (both literal and figurative). Even if I had been able to write the column by my self-imposed deadline my editor (my daughter, the college student/English major) would not have been available to help me fine tune it, as she was eyeballs deep in end of semester madness at that time. Adding insult to injury, her car decided to misbehave late last week, thus delaying her trip home for the winter break.

While I’m disappointed in myself for breaking my promise to get this online sooner, I’m also a big believer in things happening for a reason. Even though Christmas is only a couple of short days away and I’ve finished my shopping, I still feel it’s worthwhile to reflect on the experience with you, if for no other reason than to show you it is possible for a couple of recovering spendaholics to get back on their budget in the midst of the biggest spending season of the year. Surely, if we can do it now anyone can under the “normal” circumstances of day-to-day existence. So, without further ado, I give you NDYL, Part 5B.

In attempting to navigate the world of personal finance I’ve often felt much like homesick Dorothy skipping around the strange land of Oz trying desperately to reach the Emerald City, the promised land of green--how ‘bout that metaphor for financial security! I’ve often worried that I don’t have the right credentials to talk about financial matters or that I’m not knowledgeable enough about them to truly turn our situation around. Then, down floats Glinda on her herky-jerky color changing bubble with a startling revelation; this whole time I’ve already had what I needed to get to where I want to be. Turns out, my background has greater relevance to this budgeting process than I realized. In earlier NDYL columns I shared some of my back story, but haven’t felt any need to talk about my formal training until now. Originally a Psychology major, I ended up with a degree in Family Studies and a minor in Social Psychology (well, almost; a scheduling conflict in my final semester prevented me from taking the last class I needed to make it official). Suffice it to say, the fields of psychology, sociology, health and wellness, human/child development, family communication and consumer concerns are where I feel most at home. Now I recognize the valuable perspective this knowledge base can provide. It only took me four months to get there.

Pardon me while I kick myself with my ruby red slippers. You might have noticed I’m a bit of a perfectionist. No, really?! Now, however, I’m going to let that go. From this moment forward I shall stop beating myself up for not being the perfect budgeting role model I think you want me to be. Given my background, I should know better. I should know that getting a budget to work like a well oiled machine is not going to be a perfect linear process because I am a human being (and wouldn’t this series be pretty boring without all the drama?). Therefore, like all human beings, I am influenced by a complex web of variables, including but not limited to my psychological make-up, family dynamics and social networks. Add to that an unapologetically capitalistic society fraught with relentless marketers bent on getting us to spend with reckless abandon and it’s a wonder anyone ever sticks to a budget. I should also know that if I look at the big picture I’ll see some good stuff happening throughout this process. Focusing on those positives and building on them will do much more to propel us toward success than will dwelling on the inevitable mistakes we’ve made along the way. I’m not saying, however, that we should ignore the mistakes. Rather, as one of my favorite parenting experts Jane Nelson always says, we should treat them as opportunities to learn.

Having said all that, it should be crystal clear why an article about using psychological tricks to get our finances in order resonated with me. Not only did it speak my language, the language of social sciences, it renewed my confidence. Apparently, we’re not too far gone after all. We’ve pretty much been using three of the four tricks throughout much of this process, at least when it comes to spending within our means. We created a rule of thumb to help us make wise spending decisions (Trick #1, “Adopt a new mantra”), we automated the process of paying our bills and allocating our spending money (Trick #2, “Make savings a no-brainer”) and we established a SMART goal (Trick #3, “Pick a plan and stick to it”). And that is probably why, despite a bout of temporary insanity, we’ve still managed to keep our heads well above water. If we apply all four tricks to building up our savings we’ll be golden. Look out, Michael Phelps!

The fourth trick, “Spend on your best self,” is about aligning your financial protocol with your core values or identity. When your financial decisions are based on what’s important to you and who you are (or who you want to be) “identity reinforcement theory” has your back. That is, deep down, we want our actions to reflect who we think we are. Behavior that doesn’t match up with that self image causes psychological pain, which can deter us from all kinds of misdeeds, like spending money we promised ourselves we’d save. So, when battling the temptation to fritter away that extra dough my husband recently earned on a side job, I might have the following conversation with myself. “You love your family and would never intentionally do anything to jeopardize their well-being, right? Well, you’d be doing just that if you buy your son another toy truck instead of putting the money into your family’s emergency fund like you agreed to do. You know that kid already has more trucks than he knows what to do with. Buying him another one right now would be like stealing from your family, impeding the growth of the safety net you promised to build for them, for him. You are not a thief! And, what about your humanitarian values? Instead of instilling those values in him, you’ll be teaching him to be greedy and materialistic if you buy him that truck.”

Assorted versions of that interior monologue have helped me toe the line on numerous shopping trips this holiday season. Is it just me, or does it sound a lot like a classic mom style guilt trip? Just throw in a “young lady!” here and there and my full name (first, middle and last). Finish it off with the age old admonishment about “starving children in Africa” and voila! The perfect recipe for preventing unnecessary spending. Oh dear, it’s happening! That phenomenon Mark Twain quipped about. The older I get the smarter my parents have become. Twenty years ago, if you'd told me I’d get my spending under control--at Christmastime, no less!--and end up with nearly one month’s salary in a savings account by borrowing a strategy from my momma’s playbook I would have said you were nuttier than a fruitcake. But now, here I am, giving props to a head game I once promised myself I’d never play. Once again, Mom, you win. I recognize the method to the madness.

In the interest of not wearing out my welcome any further, I’m going to leave it at that. The details of how we used the other three tricks to curb our holiday spending seem superfluous at this point--heck, the holidays are practically here! However, if you haven’t finished your Christmas shopping and/or need specific tips for thoughtful gifting within the confines of a budget, or if you’re simply curious about how we did it, I’d be happy to share more in the comments section. Just let me know. I’d also love to hear from those of you who have used any of the tricks I’ve mentioned or have some of your own that are working for you.

And that, ladies and gentlemen, is how it’s done. That’s how we’ve beaten the odds during a season notorious for killing budgets, driving up debt and draining savings. That’s how we’ve managed to get ourselves back on track with our budget and solidify a habit of building up our emergency fund. Any questions?

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Saturday, 22 June 2024

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