I heard a story the other day about a relative who always has the latest technology, a nice house and car and doesn’t ever seem to worry about money. I wondered how I can learn from this so asked him how he does it. The answer I got was that he ”doesn’t let money rule me. If I want it I buy it. If it needs replacing I replace it. I just do it and don’t worry”.
At first this seems amazing. I should just let go. But then how do you let go when you have a debt plan and a limited monthly budget of what money is left after the debt money and bills have gone. Debt plans don’t take into account the need to upgrade a washing machine because it’s 10 years old and not the most economical. Or to save the cash to move house to a nicer area (which I would love to do). So how do you not let it rule you but still cope within the confines of having no cash.
It’s not easy and is going to be a work in process for me. I’ve gone back to the envelope system of diving my money up into weeks. I fell out of the habit and have noticed if I pay by card I spend without thinking and have a tendency to go overdrawn a lot. If I divide my cash into weeks and accept that I can only spend that I pay more attention. For me I worry less – if it isn’t there I can’t do anything about it. It also helps clarify just what you spend your money on. Take out drinks and coffee shops seem to be my downfall. But also going to the supermarket for a loaf of bread and coming out having spent £5 on sweets, fizzy pop and other random things I didn’t need.
What it doesn’t take into account is emergency trips to the vet. So on the one hand I stopped worrying as I was spending within my means and not letting having limited funds bother me…then the cat got sick and I had to borrow from future weeks. Now I know though my spending habits I can learn to cut down on certain things. Do I need a take out drink daily or can I just treat myself on a Monday when I have a late start at work? If I do that I save £6 a week. Not enough to pay the vet but it’s better than nothing to start an emergency fund.
The other theory is does this relative have an emergency fund? Or is it just leftover money at the end of the pay period? If they’ve never worried about money and have been lucky enough to have never struggled and got into financial trouble do they actually know the value of money? Are they then actually in a better position than me? Is it better to have had a struggle and learned lessons than never having to worry or be ruled by money at all? Interesting thoughts from a throwaway comment.
I think then by having my debt plan, leaving the cash in the bank for direct debit bills and then the rest as cash in the envelopes I am starting to let go of being ruled by my bank balance but I think my struggles will make me stronger overall.