I have officially been blogging about finances for four whole years. Four years! That seems like a really, really long time. It’s longer than either of my nephews has been alive, longer than the amount of time I spent in college, and longer than 25% of Elizabeth Taylor’s marriages. In the blogosphere, four years actually is a pretty long time, and in that time I’ve amassed a fair amount of knowledge. Some of that knowledge I’ve put to good use and some of it I’ve handily ignored. But at any rate, after all these years, I think I’ve uncovered the secret to succeeding at personal finance.
Ok, how many of you think I’m going to say “spend less than you earn”? If you do, that’s a good guess, because it is the key to accomplishing financial goals. But actually, that’s not it.
So now you’re probably thinking I’m going to say “pay yourself first,” right? Also a good guess, because saving a portion of each paycheck is really smart. But that’s not it, either.
Well, now you’re stumped, aren’t you? Your next guess is probably a toss up between “start saving for retirement with your very first paycheck” or “get that credit card paid off”! These are both great pieces of advice, but they’re not exactly secrets. Most people know that saving is good and debt is bad, even if they don’t know exactly why saving is good and debt is bad.
So what is the secret to succeeding with your money? As far as I can tell it’s this: find something to get excited about and do it.
Does the idea of having six months of expenses saved up excite you? Do it. What about the thought of not having to make a zillion payments every month because your debt is all paid up? Do it. Or how about buying a house? Or traveling? Or retiring in Hawaii? Almost everyone has something that they can get excited about when it comes to money. The secret is to figure out what that is – and do it.
But why is this the secret? Why not one of the other really basic but important personal finance axioms that I discussed before? I mean after all, you have to spend less than you earn to accomplish anything financially, right? And you have to pay yourself first to build up any kind of nest egg, you know?
That’s true, but if you’re not at least somewhat excited about spending less than you earn or paying yourself first, you’re not going to do it. There has to be something enticing about reigning your lifestyle or it’s just not going to happen. That’s why finding what excites about money is the secret. It’s the root of our motivation for making unpleasant changes to our spending habits, and from that one kernel of motivation it’s easier to change other money behaviors, too.
For example, let’s say what excites you is saving up for a house, so you go for it. You start saving. Pretty soon, you’re going to realize that saving would be easier if you didn’t have credit card debt, so you’re motivated to pay that off, too. You’ll do research about saving for a house and find out that a lot of people save in their Roth IRAs, so you’ll open one and start making regular deposits. You see where I’m going with this, right? Getting excited about something is like getting the keys to the personal finance kingdom dropped in your lap.
So what’s exciting me right now? Investing. It used to be the rush of paying off debt, but now I get a charge out of the idea of putting some money into stocks or mutual funds and seeing it grow. I’m highly motivated to make sacrifices to be able to open a brokerage account. It’s so much easier to say no to a meal out or a new outfit now that I’m fired up about something financial again.
What about you? What are you excited about these days, financially speaking? Share friends, it’s my bloggy birthday 🙂