Being the personal finance nerds that we are, Johnny and I were reading our latest issue of Money magazine, and it struck up a fun discussion. Okay, truthfully, Johnny read it and then told me about it, and then the discussion ensued. In the Editor’s Note section, it says that “The surest path to true wealth … isn’t a particular portfolio or career strategy, … [but] it’s a mind-set that emphasizes responsibility and frugality, shuns excessive risk taking, and imbues you with the confidence to go against the crowd.”
In much more simple, less-boring terms, our financial well-being has very little to do with money. It’s all about our mindsets. Johnny and I love this because it hits at the very core of why we believe so strongly in sticking to a budget.
When we were fresh out of college, living in New York City, we easily could have spent every cent of our paychecks. SO EASILY. What wasn’t easy was not spending every cent. Sometimes we just wanted to be a normal couple who’d go out to a nice, intimate restaurant, grab gelato afterwards, and then take a cab home. Instead, we kept our food spending within a total of $350/month, which meant one takeout meal a week and maybe one inexpensive restaurant a month, if we were super frugal otherwise. We had to go against the crowd in order to spend (or rather NOT spend) this way. Johnny’s coworkers would grab Starbucks in the morning, a nice lunch and another Starbucks at lunch, and then go out for drinks at the end of the day. Going and grabbing a $15 lunch was the normal thing to do, and Johnny bringing a homemade sandwich or going to grab a $1 slice of pizza was not normal. The same went for all other aspects of our lives. If an activity cost money and wasn’t necessary, we more often than not didn’t do it. Our behavior probably looked odd, even cheap from an outsider’s perspective. And I’ll be the first to admit that it was kind of odd. But our mindset was focused on one thing: becoming debt-free.
So how do you go from spending more than you’d like to having a saver’s or a debt slayer’s mindset? In other words, how do you change your brain? Welp, it’s your lucky day because I just happen to be a former spender. Buying stuff with reckless abandon makes me happy. Or it used to before my mindset changed. For me, the shift happened when we started making long-term goals. Rather than focusing on how much we could save each week or each month, Johnny and I planned what we could save (or pay off in debt) over the course of a year. That was super motivating for me. And all it took was making small, consistent changes in our spending from day to day. Imagining where we’d be if we gave into extra spending (i.e., in the same place and still in debt) was also very motivating. That’s not to say we didn’t have hiccups along the way. But because our mindset had changed, we always got back on track. And even though we’re debt-free and in a place of financial security right now, our mindset still hasn’t changed. That feeling of financial peace and security is super addicting, I tell ya, much more so than any satisfaction I used to get from buying new throw pillows (no offense, my lovely, soft, patterned squares of fluff).
And it’s all done by — you guessed it — making and sticking to a budget. At least that’s how we feel. Do you agree? Do you think the path to wealth (or at least financial peace) is more about a mindset than a financial portfolio or career path (i.e., more $$$$)? Or do they have it all wrong? We’d love to hear your two cents!