Mo Money Mo Problems

MC Hammer, Larry King, Burt Reynolds…know what these folks have in common? They all filed for bankruptcy. Yup. Obviously it wasn’t because their incomes were too small, but because their spending habits were too big. Mo money mo problems.

But no matter what your income is, this needn’t be the case, as I’m learning from Smart Women Finish Rich.

Money, values, goal-setting, life. They’re all so inter-connected – much more than I ever realized. In the first couple chapters of this book the author, David Bach, requires the reader create a “Ladder of Values.” Basically you start with the question, “What is important about money to me?” Say for example it’s “Security,” then you go on to ask, “What is important about security to me?” and so on, until you’ve created a ladder with 7 rungs.

As I completed this exercise I realized that probably more than 50% of what I spend my money on has nothing to do with what I value. That is a sobering thought. A random shirt that was “on sale” or a fancy drink from Starbucks…was it really worth it?

In order to get serious about my spending I’ve started to track every penny that comes out of my bank account. I also put a sticky note on my credit card that says, “For gas only. I’m serious!” And I’m doing something I’ve never done before: only using cash.

I’m working part-time at a store right now, so you’re probably thinking, “Of course she has to take such drastic measures!” But it’s not simply because of my small income, it’s because of what I want to save for in the future. Here’s where goal-setting enters the picture.

Bach says that in order to transform a dream into a concrete, achievable goal, you must write it down: “Until it’s written down, it’s not a goal – it’s just a slogan.” He’s talking about money here, but this is definitely true of life.

The next step is to write down your top 10 short-term goals (short-term being the next three years) and then choose your 5 most important goals and write down all of the potentials challenges you might face (challenges – not problems) and some strategies to overcome these challenges.

“If you can’t figure out where you want to be in three years, how are you ever going to be able to plan out your life 10 to 20 years from now?” (Bach 80).

When forming goals a lot of people tend to realize they’re on auto-pilot; it’s not just about the money anymore, it’s about life. One woman Bach interviewed said this: “I had never really stopped to ask myself where it is I wanted my life to head. Looking back, I can see now that I let my life get on automatic pilot. Unfortunately, as a result of being on automatic pilot, I had ended up at a destination that did not work for me” (Bach 81).

Ah, yes. I think what I love about this book is that its got Don Miller written all over it. Essentially Bach and Miller say the same things: write a story with your life. Don’t just let it happen!

My top 4 short term goals are super-short term goals – as in the next year. But they all relate back to my values. Here goes:

  1. Buy a MacBook Pro. It’s been 7 months since my laptop – including all music, articles, and photos – was stolen (I learned a lesson in backing up!). As someone who writes (and hopes to design) I think it’s time to move on my from my parents’ ancient desktop. Ok…it’s not that ancient, but it’s slow!
  2. Move out by May. But whatever will happen to Living with my Parents, you ask? Nothing! This blog has more to do with a stage in life rather than the physical state of living with mom and dad.
  3. Buy a plane ticket to the Best Place on Earth! AKA – Beautiful British Columbia. My beloved former roommate is getting married and I dare not miss her wedding. Plus there are just far too many amazing people in Vancouver whose faces (and company!) I miss way too much. BC is good for the soul.
  4. Get my eyes lasered. Yep! Contact lenses cost way too much money, and most benefit packages only cover the cost for one year in a two year period. And on top of that there’s glasses. I’m still wearing the same glasses from high school. Totally not in style.

What’s exciting is now that I’ve written down these goals, I have complete faith that I can achieve every one of them. And the next time I think about spending my money frivolously I just have to take myself off auto-pilot and put myself behind the wheel.

Enjoy some music from Notorious B.I.G…but don’t follow his lead.


7 thoughts on “Mo Money Mo Problems

  1. Great Blog!
    Having purchases in-line with your values does make a huge difference. Also, keeping track of spending habits will make a huge difference!! My only advice is, using cash has its benefits (ie helps keep track of things, sometimes there are better “Cash” deals etc), on the other hand, if you keep a close eye on your accounts, there are some solid credit cards that will give you a return (cash value) for the purchases you make. For example, if you spend 200 bucks a month on gas, and put it on your visa, eventually u get money back from that card with point accumulation…I use that “extra” money for buying small gifts for people on their bday, holidays etc.

    make cents? (ehehehe)
    Keep it up Nat!
    in Him

  2. Hey pretty lady! These are some great goals you’ve set for yourself…I had forgotten that your laptop was stolen…I will send you whatever pics I have from when you were out here…a small amount, but it’s something! Miss you! I love hearing your updates! Love Tiff

  3. Pingback: On Food and Money «

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