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Budgeting

My Top 5 Personal Finance Books

Posted on November 6, 2018

Today I wanted to share with you my My Top 5 Personal Financie Books. I am a huge fan of reading and although I don’t get a lot of time to catch up on my wish list of books to read I do try and get around to reading one book every month. It’s not a huge number and nothing to brag about (I’ve seen some people on Insta do 12 a month… WHAAAAT) but I do make an effort to learn and grow and one of the best ways I have found to do that is to read a lot of different books.

Over the past handful of years and as I discovered new passions like Simple Living and the F.I.R.E movement, I have come across many amazingly educational and helpful books across many topics ares: Minimalism, Finance, Consumerism, Millionaires and Simple Living to name a few of my favourite subject areas. As an Accountant and CPA it wouldn’t come across all that strange for me to love reading about Personal Finance but I think there are so many amazing books out there now that anyone can learn from and enjoy and I promise you they will not put you to sleep. Far from it, I think they will do wonders to motivate you to pay down debt, develop new spending behaviours and learn about the big world of personal finance without having to take a three or more year degree.

And so here I will share My Top 5 Personal Finance Books with you in the hope that they will add value to your life and inspire new habits and help you on a path to financial freedom and building wealth!

**This post contains affiliate links. If you make a purchase of a product from the links in this post I will receive a small commission, at no cost to you. This allows me to keep my blog advertisement free and support the running costs of my blog. I only recommend products I believe will add value to others and that I love myself.**

My Top Five Personal Finance Books

5. I Will Teach You to Be Rich, Remit Sethi

I am a huge fan of Remit’s after a friend recommended me his material and loved his in your face attitude and unapologetic views on spending in his Book I Will Teach You To Be Rich. He goes as far as having a Stupid Mistakes Fund for unexpected expenses like fines and explains how you can prepare for big life expenses like weddings by thinking well ahead and saving up over the longer-term. He delves into his investment choices and why he believes index funds outperform their higher fee counterparts. And gives valuable advice on how to haggle on cars and other big purchases ‘like an Indian’ without wasting your time. If you’re someone who prefers a less prescriptive finance guru who doesn’t spout cut up your credit cards and count every last cent and someone who has a bigger picture approach to finances that won’t make you cut out your daily coffee, this book is for you.

4. The Millionaire Next Door, William D. Danko

Like most people, I am fairly fascinated by millionaires so when Mr J. Money at Budgetsaresexy.com recommended this one I had to satisfy my curiosity – How do Millionaire’s live (do they know things let’s find out – Bojack Horseman anyone ;))? Don’t we all want to know that?

This book was based around research conducted over 20 years about the spending habits of millionaires from their car buying habits, where they live, how they invest, what they wear and so on. It also delves into ‘entitlement syndrome’ and how to raise self-sufficient kids who don’t expect everything handed to them on a platter from the bank of Mum and Dad. Great for any Mum’s and Dad’s out there!

It also details the spending habits of PAWS and UAWs (Underaccumulators of Wealth) and the difference in their spending behaviour. If you are keen to achieve millionaire status, or just are a little curious about how your undercover millionaire lives their life check out The Millionaire Next Door.

3. Your Money Or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence: Fully Revised and Updated for 2018, Vicki Robin and Joe Dominguez

This was the book I was looking for my whole life, and I only just finished listening to it THIS MORNING. I heard Mr Money Moustache mention it as a top recommendation a few years back but it took me this long to get a copy and read it. But it was well worth the wait.

Your Money or Your Life was originally published in 1992 but was re-released in 2008 and 2018 with the addition of a foreward by none other than Mr Money Moustache himself, to be more relevant to today’s financial climate. If you are a finance nerd who loves spread sheeting, tracking every dollar and aspire to F.I.R.E. (Financial Independence, Retire Early) this is a book that can give you a thorough plan.

It’s based around the 9 steps Vicki and Joe used to become financially independent and the concept of trading your life energy for money. And has some amazing crossover if you love topics on Minimalism, Side Hustling and Frugality. This book touches on everything you can think of: how to invest your money, aligning your values with career and investing, ways to save money and live a more meaningful life and earning more. It provides you with the tools to track your income vs expenditure and your passive income as well as calculating your Net Worth.

If you are keen to make your money work for you and get your time back and want to get even nerdier with your budgeting approach and learn about investing this book is a great place to start.

2. The Total Money Makeover, Dave Ramsey

I first heard of this book about three years ago now and was the first personal finance book I read on my finance book binge. As I read it something just clicked inside of me, as if Dave was saying the words I had been thinking all along – I hate debt and I want out! His reference to #gazelleintensity just described my attitude to debt in a matter of two words – RUN FOR YOUR LIFE.

The Total Money Make Over is based on the 7 Baby Steps and give a clear cut plan on how to get out of consumer and mortgage debt and build wealth. If you are sick of living week to week and can’t take the stress of another financial emergency this book could seriously change your life.

Dave has some amazing principles on spending and approaching debt that can unwind you from even the most stressful financial situations without the need for bankruptcy but definitely with a bit of sacrifice – on a rice and beans level. If you are sick of debt please read this book today, you won’t be able to put it down.

1. The Barefoot Investor, Scott Pape

As an Aussie lover of finance, there was no way I could look past our own homegrown finance guru Scott Pape with his recent book The Barefoot Investor The Only Money Guide You Will Ever Need. If you want a finance book which won’t bore you and that can get your partner involved in the conversation this is it! The Barefoot Investor is based around Date Nights with your partner where you tackle different financial areas from Health Insurance, Superannuation, your Mortgage, growing your Wealth and Retirement.

A great one for people who get the chills thinking about budgeting, Scott’s bucket system is simple and easily implemented by even the most novice people. If you are an Aussie as well you can’t go past a recent book that focuses on the Australian related finance space and there is not one 401k or Roth IRA section for you to skip over 😉

And there you have it guys My Top Five Personal Finance Books to get you started on your #debtfreejourney and path to building wealth!

What are your favourite Personal Finance Books? Let me know in the comments, I am always keen for new recommendations! 🙂

[Photo: Sharon Mccutcheon @ Unsplash.com]

If you found value in this post I would be super appreciative if you could share it with others who might also find value in it 🙂

Budgeting

Why you need to track your Net Worth

Posted on July 1, 2018

Do you Track Your Net Worth? If you don't you are missing out on valuable information on your finances.

About a year ago, I stumbled upon J Money’s blog Budgets Are Sexy, a now favourite finance blogger of mine who openly tracks his Net Worth on his website. I was instantly amazed at how he tracked everything and monitored his families financial progress month to month, year on year.

At the time of discovering his blog I wasn’t tracking my Net Worth and hadn’t really ever given much thought to it. I figured as long as we were ahead on paying off our mortgage and avoiding adding any other debts and had enough to cover our bills each month we were doing okay. And maybe we were, but I’d seen a whole new way of tracking finances and I wanted in!

Of course I knew our rough debt and savings balances and checked our Superannuation balances when we got our bi-annual statement, but I didn’t know month on month how much our Net Worth had increased or decreased.

Since then, May 2017 I have been recording our Net Worth figures each month, and was amazed to see that over that 12 month period our Net Worth had increased by 13%! It has been a huge motivational tool for our finances as we watch our debts slowly decrease and see that Net Worth figure slowly inching up each month.

And the most awesome part of it all is it is not a time consuming process. It takes a whole 10 minutes a month! That’s it! Which is totally worth it to know where you are at financially and how you are tracking towards each of your financial goals!

If you have been considering recording your Net Worth and weren’t sure how to get started, I am writing this post for you! Check out my Beginners Guide To Tracking Your Net Worth!

Why you should track your Net Worth

Before we start any goal we need to work out our why, that is, the reason behind the effort we need to put in. So many of us go to work for forty or more hours, week after week and have no goal or plan for the money we bring home. It just slips through our fingers, somehow every last dollar is spent, often without any idea of where it went. Month after month, there is nothing left over to save or invest for your future. Retirement is something that is put on permanent hiatus until 40 or 50. Which may not seem like a big deal but you are losing a good 2 to 3 decades of growth you will never be able to get near once you leave yourself only a decade to build your wealth. The time to start building wealth for your retirement is now, or as soon as possible.

By tracking your Net Worth your spending habits are right in front of you in black and white on the page. If you spend all your pay check you’re $0 bank balance will make it blatantly obvious that you have nothing to show for your hard work. If you are swimming in debt and your Net Worth seems to be going backwards, not forwards again you will see that you are not building wealth but doing the complete opposite. Until you see the numbers staring you in the face it can be hard to see where you are financially and what your financial goals are. Having your assets and liabilities laid out in front of you can help you identify the need to change your current spending habits and create a more secure financial future. It can help us to start being more intentional with out money and motivate us to make better choices.

Now think about your why and make a list of the top three reasons you want to track your Net Worth.

Some reasons to track your Net Worth could be:

To grow your wealth so you can retire comfortably in the future and not be stuck working until you are 70 or older
Enable you to keep track of your debt balances so you can work towards paying them off faster
Set targets to aim for to help motivate you save and pay down debt

Now that you know your why for tracking your Net Worth we can get started on How to Track Our Net Worth.

How to Track Your Net Worth

There’s nothing scary when it comes to tracking your Net Worth and you’ll soon wonder why you weren’t tracking it all along. All you need is a simple accounting rule:

Net Worth = Assets – Liabilites

That is really all you need to know to get started. When we track out Net Worth we simply need to list our assets and liabilities and the difference is our Net Worth. If your Assets are higher than your Net Worth you have a positive Net Worth, if your liabilities are higher than your assets, you have a Negative Net Worth. Now I will go into a little bit about what Assets and Liabilities are and how they differ.

Assets:

Assets are all the things that make you money and that can be sold off for cash. They include things like savings accounts, term deposits, Superannuation or retirement accounts, property, vehicles and stocks or bonds.

Of course you may have other assets like jewellery, art, tools, furniture etc but we are going to ignore those for simplicity as their value isn’t as easily estimated or guaranteed. We just want to focus on the most liquid assets (that’s just accounting speak for assets that are easy to turn into cash!) that we can accurately estimate their current value.

Liabilities:

Liabilities are the things that cost you money and involve you paying money to someone else. These include mortgages, student loans, cars loans, personal loans, credit cards, pay day lenders, after pay, overdrafts or anyone else you owe money to.

What to Include in your Net Worth Calculation:

As described above, we are going to list any Assets and Liabilities at their current balance at the end of each month to calculate our total Net Worth. That is the balance at the 30th or 31st of the month, depending which month you are in.

ASSETS

Here is a list of Assets you might include in your Net Worth Calculation.

CASH

Bank Accounts – List all your bank accounts and any term deposits at their current balance. This might include your Everyday transaction Account, Emergency Fund, Savings Accounts etc.

PROPERTY

House & Land – List any land or property you own at the current market value. For a more accurate estimate you can contact a real estate agent in your area for a market appraisal or you can do an estimation based on what similar homes in your area are selling for.

Vehicles – Use a car valuation website like Drive and Kelly Blue Book to get the current value of your car. Be sure to review the odometer reading of your vehicle and adjust the valuation if your vehicles odometer reading is higher than the valuation odometer reading range.

I like to be extra cautious and take the lower private sale value of my vehicle and take off a further amount of say $1000 if I know that my car is not in excellent condition. It doesn’t have to be an accurate estimation of course, but you want it to be a reasonable estimate of what you could sell the vehicle at today.

INVESTMENTS

Superannuation/Retirement Accounts – List your Superannuation or Retirement Accounts and your current balances here.

Stocks & Bonds – Here you will again list the market value of any current stock or bond holdings you have. This is a great way to monitor how they grow over time.

LIABILITIES

Mortgages – List any mortgages on your home, land or investment properties that you have at the current balance of the loan. This will offset the value of your asset to show you what Equity you have (e.g. your current home value less what you still owe on your mortgage).

Credit Cards – List each credit card you own and the end of month balance of each. Your current balance will be listed on your online log in portal or your most recent credit card statement.

Car & Personal Loans – Check you car and personal loan account for the current balance of your loan. Don’t forget to include the vehicle’s current value in the asset section to offset the loan balance to give you your vehicles true Net Worth.

Student Loans – List your current student loan balance/s.

For any Aussies reading this, HELP-DEBT is wonderfully difficult to know what you owe month to month as you only get a statement once a year with your tax return. For our Net Worth calculation we just took the HELP debt balance to be the prior June 1st balance which you can find on your most recent HELP-DEBT statement and just carried that across for the year until we had the new updated statement.

Other Credit: List any other debts you have here. These may include After Pay balances, overdrafts, pay day lenders any money you owe to friends or family or anything else.

For help on how to minimise your debts once and for all check out: How the Debt Snowball Can Get You Debt Free Faster

Once you have all your assets and debts listed you can now calculate your total Net Worth for the month by taking away the Total Assets from the Total Liabilities.

If you want even more simplicity, this Net Worth Worksheet available in my Etsy store will take any work out of preparing your own Net Worth file. Simply enter your relevant categories and figures and the worksheet will do the rest for you!

Don’t forget to set a reminder on your phone calendar or in your planner to do this at the end of every month, or as frequently as you like so you remember to do it and build the habit!

You’ll be just as excited as I was to see how you had progressed in 12 months time. And there is nothing that will help you stay motivated to eliminate debt and grow wealth more than tracking your Net Worth!

This weeks comment questions: Do you track your Net Worth? What made you start tracking it? And do you find it helps you stay motivated with your budget and financial goals? Let me know in the comments!

Budgeting

How to Say Goodbye to Financial Anxiety with Sinking Funds

Posted on June 11, 2018

Leave bill shock in the past with Sinking Funds

It’s that time of the year again, you open the mail (or email ;)) to see a bill for your car registration or insurance renewal staring you in the face. It’s due in three weeks time. What do you do now? Panic? Just chuck it on the credit card? After all, you’ll pay it off gradually over the next year, right? Uh sure… but what about the last three bills you put on that same credit card that you still need to pay off?

That, my friend, is what we call a band-aid solution to your finances and is a surefire way to end up with mounting credit card debt. It’s a quick fix that will only cause you endless stress and anxiety, and throw you into a panic every time you get a new bill. It could be a nightmare for future you. And we don’t want to screw over future you! We want a happy, debt free future you that has the flexibility to travel and go out, and cut back hours at work, doesn’t that sound great?! It sure does to me! So how about instead of continuing down the same old path of panicking every time your car breaks down or you get a new bill in the mail I explain How to Say Goodbye to Financial Anxiety with Sinking Funds.

I was faced with a similar bill shock situation back when I was 21 that changed my approach to finances from that day forward and forced me to think about my financial future.

I had just walked down the driveway to my letter box to check the mail. I saw a letter addressed to me and quickly opened it. To my shock it was a $1200 bill for my car registration and Greenslip renewal. Frick. I had completely forgotten my registration was due. That bill that comes at the same time, every.single.year. I’d only had two of these bills before but hey, it was enough for me to know better. I couldn’t believe that it had completely slipped my mind.

Thankfully at the time I had just enough saved up in my bank account and managed to pay both bills with a little left over to cover the car inspection. However, I now had only $25 to my name to last me until pay day. It wasn’t the end of the world by any means, I still lived at home and would get paid again in a week, but it did mean the small financial safety net (what I’d later learn to be called an Emergency Fund) I had built up for myself was now gone in a split second. I now had no money for petrol, food or anything else for the next week until pay day.

My stress wasn’t over yet. I crossed my fingers hoping the car would pass the inspection as I sat in the waiting area of the mechanics. I knew I didn’t have any more money for any other repairs so needed good news! I held my breath as the mechanic walked over to me to tell me the outcome of the inspection. He told me everything was fine, but he couldn’t pass me. I needed new wiper blades that were going to be an additional $40. Again, not the end of the world by any means, but I didn’t have enough. Had my car needed $1000 worth of repairs I would have been in disaster town. I told him I was down to my last $25 and pleaded for him to pass me, assuring him I’d come back the next day to get them done hoping Mum would spot me some cash, which of course she did, and I went back the next day to get them repaired.

This event was a small financial blip in my adult life but taught me a valuable lesson that changed my financial future. I never wanted to feel that financially insecure again and committed from that moment I would always plan ahead. It was a small moment in my life but made a huge impact.

Have you ever been surprised by a bill or not had the money to pay one? You’re certainly not alone. It doesn’t have to continue to be the norm. The answer to avoiding bill shock is simple and one that you can implement in a matter or minutes. We are going to prepare ahead of time. We know the bills are coming every year or quarter, so why don’t we utilise the time we have to save up in advance and plan ahead for those bills? We can! And this post is going to teach you how to do just that that using a simple budgeting system called Sinking Funds.

Don’t let that term scare you into thinking it will be too much work, or something only finance nerds can manage. It’s going to be easier then you think and I promise, like my financial defining moment, and with a little bit of effort you can say goodbye to financial anxiety too.

The awesome news is you will only have to set up your Sinking Funds once and spend a few minutes a year updating them. The even better news is that once you implement your Sinking Funds you will never have to worry about bill stress again. Yay! Let’s get into it!

Accepting the Reality of Bills

The best thing we can all do for our finances is accept that bills are part of life – the essential ones: water, electricity, health insurance, car insurance, they’ll always be there. Sure there are other, more fun things we could spend our money on but let’s be honest – isn’t having essentials like safe tyres for our car or heating for our homes in winter worth it? Instead of dreading those bills, let’s use our Sinking Funds to prepare ahead of time so they aren’t such a drain on your wallet.

What is a Sinking Fund?

A Sinking Fund is a fancy term for saving up for a future bills such as, your car insurance or your next holiday. Instead of dealing with them as they arrive and trying to cover the cost of your bill out of one or two pay cheques, you can plan ahead for your regular bills and spread the costs over 52 weeks or 12 months of the year. You can set up Sinking Funds for anything you like: Christmas and other gifts; Car insurance; clothing; an annual holiday or to save up for your next quarterly utility bill.

Sinking Funds are similar to a regular savings account but rather than adding to your savings, they are working backwards from the budget expense totals and saving up a portion of that over time. Essentially, you only put away what you need to cover your bills in your sinking fund, whereas with a savings goal your intent would be to grow that savings balance over time above and beyond your expenses.

Why Do I Need Sinking Funds?

Here are some of the benefits of a sinking fund to help you understand their usefulness in your budget:

A sinking fund is a way to plan ahead and estimate bills that are due early on, rather then waiting for the bill and eating two minute noodles for the next month;
They will help you avoid paying bills on the credit card and wracking up large credit card debt at high interest rates;
They give you piece of mind that if a bills arrives you will have the funds to pay for it. This will reduce budget stress and anxiety;
They help take the guess work out of budgeting. Once you know your bills are accounted for you know what you have left over that is allowed to be spent rather then spending all your pay check, when in reality some of it should have been put aside;
You can use them to save up for events like Christmas or vacations to reward your family and make sure there is money put aside to enjoy yourself.

How to Set Up Your Sinking Funds

Here are some simple steps to get you started with your sinking fund:

Step 1: Write a list of all your bills and anything else you want to add (such as a fund for Christmas) during the year. An example has been provided below for you.

Step 2: Write next to the bill a reasonable estimate of each bill or expense for the year. Take note of the bill frequency. If for example, you have a bill paid quarterly, you will need to multiply it by 4 to get the yearly total.

Step 3: Add up the bill totals for the year, write that down and divide that amount by 52 weeks or 12 months depending on your budgeting preference or pay cycle to get your weekly or monthly sinking fund total. This is the amount you will need to put away to cover these costs each period.

Refer to the below table for some category examples.

In this example there are 8 Sinking Fund Categories totaling $15,000 for the year which would require $1,250 a month or $288.46 a week to be set aside to cover the bills as they fall due. In the next step we’ll get your accounts set up.

Setting Up Your Bank Accounts

When setting up your sinking fund accounts there are three options:

Option 1: Keeping all the sinking fund categories in one ‘bills account’ that is exclusively for your sinking fund total

– Pros:

Only requires one ongoing monthly transfer to be set up to one account
Monitoring is easier as you can check your balance by logging into one account only
Can be easily tracked using the Minimise With Me Sinking Fund Worksheet

– Cons:

Having one bank account with all sinking funds in it means that you won’t know the balance of each individual sinking fund unless you track it in a worksheet or in a workbook

Option 2: Setting up multiple bank accounts for each individual category:

– Pros:

you can name each bank account according to your category e.g. Christmas, holiday, car expenses and see at a glance what you have in your account for each sinking fund. No need to calculate your balance as it will be the account balance.

– Cons:

Not all banks let you have such a high number of accounts so you may need to open accounts at multiple banks and have multiple log ins
This option requires a transfer to be set up to each account so takes a little more work to set up initially, but less ongoing work as you can see the balance at a glance.

Option 3: Cash Envelopes

This third option is for those who prefer to work with cash in their budgets. Simply grab a few envelopes and write on each one what expense category it relates to.

– Pros:

Great for people who prefer cash and seeing their money or those who want avoid budgeting worksheets

– Cons:

Putting away $250 or so into a cash envelope you leave lying around at home or in your handbag can be a security risk. This method is best left for the smaller, more frequent bills to limit how much cash you have in your home. Of course you can mix and match with the bank account option and cash envelopes.

Once you have decided on one of the above two bank account set ups or cash envelopes you can open the necessary bank accounts you need.

These accounts should ideally be fee-free accounts. Shop around for your bank account/s to ensure you aren’t paying fees you don’t have to.

Once they are set up, ensure that you use them exclusively for your sinking fund. Do not go and withdraw money for anything that is not included in your sinking fund or you will leave yourself short when they are due.

Take the Work Out of Saving and Automate

Now that your accounts are set up you will need to set up your automatic savings transfers. You need to schedule a regular transfer from your regular transaction account where your pay/s is deposited to your sinking fund account/s for the relevant totals you have listed. Set it to come out the same day every week or month and for the same amount until you cancel it or revise it. Set it for the day after your pay day every week or month. That way the money comes out the day after you are paid, before you can accidentally spend it.

Once these automated transfers are set up you will only need to review them every so often. A quick glance every quarter and adjustment at the end of the year to account for any increases or changes would be ideal.

If you have an irregular income, but are sure that your earnings will cover the total of your transfer each pay period you can go ahead and set it up as an automatic transfer as well. But please note, if your pay is extremely erratic you may want to opt to do this manually instead so your automated payments don’t bounce. A simpler method is just to budget off the minimum you earn so you know you will always have enough coming into the account and save yourself from the manual work. Automated finances are much more convenient.

Build a Buffer

When you first start your fund you are going to be a bit short for some of your sinking fund categories. If for example, you are starting your sinking fund in January and have an annual bill due in March, you are not going to have 12 months to save up for that bill so you will either need to save more for those three months to cover that bill amount e.g. The bill divided by three months or you can start off your sinking fund with a bit of a buffer. A $1000-$2000 Sinking Fund buffer should cover you for any bills you are short for in the first 12 months until you can build up your payments to cover each bill as it is due.

A good tip to get this buffer built up quick is to walk around your house and grab anything you no longer want or use and list it online to sell and get some quick cash that you can pad out your sinking fund account/s with.

Keeping Track of Your Sinking Funds

If you you didn’t opt to have separate accounts for each sinking fund goal and want to keep track of your Sinking Funds in the one account, you can do so by using the Sinking Fund Worksheet which will help you plan out your sinking fund goals, monthly deposits and withdrawals and keep track of each individual sinking fund balance within the one account. It comes with some pre-filled categories to get you started and has plenty of space for you to add your own to suit your lifestyle and budget needs. Simply update the worksheet each month and reconcile it to your Sinking Fund account balance. And that’s it, you now know what your Sinking Fund balances are at any given moment!

If you are finding that you are relying on credit cards or overdrafts to pay your bills, or are in arrears, give the Sinking Fund budgeting method a go and in time your bill woes will be a thing of the past!

This week’s question: Do you use sinking funds in your budget? What happened that made you realise that you needed them? Please share your experience in the comments below 🙂

If you found value in this post I would be super appreciative if you could share it with others who might also find value in it 🙂

[Photos: J Kelly Brito & Raw Pixel]

Budgeting

How to Change Your Spendaholic Ways and Be More Intentional With Your Money

Posted on May 17, 2018

Do you want to change your spendaholic ways? Take the Spending Questionaire and find out how intentional a spender you are.

Have you ever found yourself browsing the mall out of boredom and walking out with more bags than you can carry? You get home and soon cringe at the pile of stuff thrown across your bed. You hang everything up in your wardrobe or fold it neatly in your drawers with the best intentions, not realising that you might not ever wear any of it.

Maybe you just love a good sale and can’t resist a buy one get one free offer. You walk out with two pairs of whatever you just bought thinking to yourself how great a deal it was even if though you know you didn’t need either of them.

You reach for your credit card, and with a quick tap, you’ve bought a new lipstick to add to the 20 others you have at home in your bathroom drawers.

Your once new car is now seven years old and you might have finally paid it off. You have a spare $300 a month freed up to do whatever you want with it… Maybe you’ll save it up for a rainy day fund or put it towards that holiday you’ve been wanting to take the family on. But some of you will quickly go out and buy another new car with a new repayment to go with it. After all, you’ve grown used to having a car payment so what’s the difference right?

If you can relate to any of the above occasions these could indicate that you may be spending your money without intention.

Of course, when we are bombarded with advertisements wherever we look, it can be hard to recognise problem spending patterns until you stop and consider your spending habits and their impact on your finances and maybe even those close to you.

If you appreciate a new handbag or new camera lens, there is absolutely nothing wrong with that. We all work hard and deserve something we love or enjoy every now and then – of course, as long as we can afford it. That is, we can pay for it in cash or at least pay off the credit card in full when the payment is due.

But that’s usually not the case.

We can all so easily pull out our credit cards to get that must-have new item today rather than waiting until we save up for it. We justify our spending because we can afford the repayments, but this might not always be the case. Our unintentional spending can overtime blow up into much bigger financial problems.

A new subscription or pair of shoes here and there is manageable, but when spending becomes a regular, impulsive, and unintentional habit we can find ourselves in a financial situation that can be very difficult to get out of.

Take the Minimise With Me Spending Questionaire to see if you might need to get more intentional with your spending habits.

take the spending questionnaire

Some tell tale signs you could be a spendaholic

These are some signs that you may need to adjust your spending habits and curb your spendaholic behaviour:

you earn good money but have nothing to show for it
you often find yourself at the mall or shopping online in your spare time or to alleviate boredom
you list shopping as a main hobby of yours
you shop socially, with your friends regularly
you have mounting credit card debt
you don’t remember what your credit card debt was for
you’re running out of space in your home, potentially looking into additional storage or upsizing your home
you often find yourself buying things on sale just because it was cheap but have no idea where you will store it or if you even need it
you feel guilt after a big shopping spree
you hide what you are buying from your loved ones
your spending causes arguments with your spouse, children or other loved ones.

If the above examples sound like you it may be time to reassess your shopping habits and curb your excess spending. It’s important to acknowledge that it’s not just yourself that you are harming. You may not realise it, but your shopping or spending addiction could be harming those around you such as:

causing a partner or family stress via clutter or increasing debt. Maybe your children are aware of your lack of financial self-discipline and they spend their days worrying about your quality of life in retirement or your parents worry about your ability to pay your day to day bills when you move out of home.
depriving yourself and loved ones of things that add value like experiences and a family vacation when all your money goes on stuff and to ever increasing debt repayments. Or even depriving them of the basic necessities like power because you couldn’t pay the bill.
finding it harder to make ends meet because you’re outspending your earnings and in turn having to work more and more to keep up.
setting your children up with the expectation of a life of instant gratification and the financial woes and unhappiness that come with that.
hurting yourself in terms of looking for fulfillment in your shopping trips rather than in more meaningful pursuits like following your passions, personal growth and achievement and strengthening your close relationships.

Change Your Spendaholic Ways

If you identify with any of the above scenarios and feel that you could minimise your spending and be a more mindful spender, here are 10 Ways to Change Your Spendaholic Ways and Be More Intentional With Your Money.

1. Shop with a grocery list and meal plan
One of the biggest budget leaks and opportunities to change your spendaholic ways can be your grocery budget. It can easily add up to $500 or more a month and we all love our food! Instead of feeling guilty again at all the random stuff you threw into your trolley, go prepared. Writing your shopping list and meal plan before you have even stepped foot in the store is a great way to cut down on impulse buys and go over your shopping budget. Make a game of it and set yourself a challenge to try and stay under a certain weekly dollar amount with your grocery shop each week. And don’t be afraid to try the discounted home brand ranges. They can often be as good as the regular brands and save you lots week to week.

2. Avoid the shops
Create new habits and stop shopping every time you think you want or need something. You’re not going to stop breathing if you don’t have what you want right now. Slowly build up a list of items that you need or want and give yourself time to truly consider if you really do want those items before you hit buy. You might find the next morning or week you have completely forgotten what you even had in your cart.

Only go to the shop once to get those items. You’ll be so busy getting everything off your list that you won’t have time to spend browsing the aisles. Eventually, you will develop a habit of running in, grabbing your list and running out. Once you see how much time and money it will save you. you’ll change your spendaholic ways in no time!

3. Try a no-spend challenge
A great way to reprogram old spending habits is to take on a no spend month challenge. Make a list of any approved purchases for the month ahead and commit to only buying those or consumables and food. Anything else you want will have to wait a few weeks. Do it with a friend for moral support. Make it a little more fun by seeing who can spend the least amount of money that month.

4. Pause and research before you buy
Have you ever bought something in a rush only to realise that it was cheaper somewhere else? Or regretting that you even bought it because you knew you didn’t really need it? In order to change your spendaholic ways you need to recognise when you are buying on impulse and put the brakes on.

Think of how much you could save over the next year if you just waited 24 hours before making each purchase. If that’s too much of an ask, take a walk or go and have some lunch. If you really want that item you will make the effort to go back to the store. It’s a small barrier to your impulse buying for something you probably don’t need.

Before you hit the Buy it Now button take a day to think over what you are buying and give yourself time to consider if that item is the best fit for you. Don’t forget to do your research and look into product reviews to make sure it is a quality product and ask these 7 questions to make sure you are making an informed decision before you part with your hard-earned cash.

5. Find a new hobby
Too often we can find ourselves shopping as a form of entertainment. We go out with our best friends looking for a new outfit and shoes to match, it’s what we’ve always done. Or we wind up at the shops on our lunch breaks spending money as we have nothing better to do. If you are heading to the shops looking for entertainment or freedom from boredom it’s probably time you got yourself a new hobby.

Think of all the things you could be doing with that time and money. Instead of spending all your money at the mall find your passion. It might even be something that costs money but will at least be something you are spending intentionally on. Try reading more, catching up with friends in the outdoors, learn to sew, or sign up for a new class. Fill your time with things that add value to you like exercise, volunteering, or learning. There are many things you could be doing that are more fun than being locked away in some change room for the day.

6. Learn to value yourself and experiences over things
So many of us have been stuck in a mindset where we derive our self-worth from what we own or wear. The brands on our shirts, the luxury car, and McMansion we live in are now deemed so necessary that we will go into tens of thousands of debt or more in order to have them to show off to others and fit in.

We could all stand to worry less about what people think of the car we drive or how much our handbag costs and focus on what really matters. When we derive our value from the things that truly matter – our relationships, passions, growth, and experiences, not just what we can buy, we can break the cycle of keeping up with the Jones and change our spendaholic ways. In turn, we can learn to be more mindful of what we are buying and redirect our money towards things that truly add value to us such as a class we enjoy or saving up for a trip on our bucket list.

7. Adopt a minimalist lifestyle
Minimalism is the pursuit of what is meaningful and removing what is not. It is a tool that can help you identify what truly makes you happy, which may be less than you think. I’ve personally sold, donated, and recycled 70% of our possessions over the past two years and this has shown us how little we need to be happy. Two years later and I am still finding things we can do without. By truly asking yourself what adds value to your life you can eliminate wasteful spending and better utilise your time and money on what is important to you.

Maybe you don’t need an overflowing wardrobe to feel stylish and put together and a smaller capsule wardrobe would be enough. Maybe you don’t need every single book you see in the bookstore with an interesting plot and instead, you can order it on your eReader when you have the time to read it. Minimalism can help you focus on the essential and eliminate the excess without depriving you of what you enjoy or need.

8. Identify one problem expense area in your life and start cutting it
Small changes can go a long way. Rather than trying to cut all expenditure at once, ask yourself what your biggest problem spending area is? The one that makes you feel the most guilt every time you blow your savings on it. Once you have identified that one area, work on reducing your expenditure. Don’t worry about the others for now, you’ll get to those in time, for now, we are just tackling the big fish.

Set yourself a new budget for that cost whether it’s coffee, clothing, weekend drinks, books, or whatever your vice is, and try and stick to your budget. It might be difficult for the first and second month but after a while, you will start to form new spending habits, and spending less on that area will feel less difficult. Once you have developed the habit of sticking to your budget set a new one for your next problem area and work on that. Over time you will gradually change your shopaholic ways and adapt to your new budget goals.

9. Limit your exposure to ads
If there’s anything that unravels your attempts to change your spendaholic ways it’s the constant subjection of advertising. Whether it’s on the radio, TV, YouTube, in your favourite magazines or online there are thousands of new products trying to nab your wallet contents. Within 15 seconds you are considering buying something you didn’t even know you needed. To reduce the chances of you stumbling upon something you probably don’t need, try and reduce exposure to as many advertisements as you can. Of course, it’s not easy to do as we are bombarded with these everywhere we turn but there are some helpful tips to reduce what you do see:

swap out cable and free to air TV for a subscription like Netflix that doesn’t have advertising
Unsubscribe from email newsletters that will tempt you with their sales updates and latest products
Stay out of the malls – if you can’t see a sale sign you won’t know it’s on
Limit reading of magazines that contain hundreds of advertisements and reach for a book or blog instead

10. Consider the opportunity cost
Every time we buy something we are using a resource, our money, that could be utilised elsewhere. Consider the opportunity cost if you really wanted to buy a new car. You could buy it for $30k or you could instead, buy one for $10k and invest the $20k. In 30 years that car will be long gone but had you invested the money at age 30 until age 60, at an 8% growth rate without adding a single dollar that money would now be worth $218k. Which one do you think future you would pick?

Maybe buying more stuff means you have to work longer hours in order to earn more money to keep up with your spending. The opportunity cost here is the lost time you have when you have to work more to bring in more money to cover those extra debt repayments or spending habits. When we spend money we lose out on time or future growth opportunities.

If you want to change your spendaholic ways consider when making those bigger purchases in particular, if that really is the best use of your money. If it is something that will really add value to your life and bring you joy then it’s okay to go ahead with the purchase if you can afford it, but if it’s something that won’t really make a lasting benefit to you think again before you hand your card over.

Want more help?

For extra resources to see if you might need to reevaluate your spending habits Take my Spending Questionaire, a list of 30 Questions to help you know if you are Spending Intentionally or have room for improvement.

You may also like to check out 17 Ways to Reduce Mindless Consumption in Your Life for some additional tips on how to minimise any excessive spending and spend your money more intentionally.

This week’s comment question: What have you found has been the most helpful way to Reduce Your Spendaholic Ways and allowed You to Spend Your Money More Intentionally. Share your tips and what you have found worked for you in the comments below 🙂

If you found value in this post I would be super appreciative if you could share it with others who might also find value in it 🙂

[Photo: Tristan Colangelo, Unsplash.com]

[Photo: Robin-Spielmann, Unsplash.com]

Organising

A Beginner’s Guide to Meal Planning

Posted on April 23, 2018

I used to be one of those people that couldn’t seem to get myself organised in the kitchen and failed miserably at any kind of meal planning.

We would go shopping whenever we got around to it, usually once a fortnight, and walk out with $200 or more of groceries for two people and still end up ordering more take-out than we felt we should. We had our grocery list, but there was no real plan in place which meant we often ended up buying a lot of things on impulse once we hit the stores.

The end result was that our pantry, fridge, and freezer were always overflowing. Our disorganisation was costing us big on our grocery budget. We rarely had a complete meal planned out and dinner was a stressful event. We found ourselves constantly wasting food at the end of the week that we didn’t get around to eating, along with it our money.

After watching War on Waste and seeing the level of food waste in Australia, I wanted to do more to reduce our household waste. I hated how much food and time we were wasting and wanted to take the stress out of mealtime and save on our grocery budget. I was determined to give meal planning another go with my newfound motivation.

How I got started meal planning

I tried to keep the process as simple and quick as possible. I wanted to be able to do our meal planning as close to on autopilot as possible. Here’s what I did:

Grabbed an old recipe folder I had tried to use in the past and removed any recipes that I didn’t want
Organised my recipe folder by category: Vegetarian meals, Soups/Side Dishes, Pizza/pasta, Meat dishes, and Desserts so everything was easy to find
Photocopied some new recipes from my recipe books and added them to the folder
Made a master list of about 15 recipe ideas that we loved and had cooked before and listed under the title every ingredient we would need to make that meal. I also included vegetarian versions of recipes for my husband so we could cook the same, or at least similar meals more often.

Keep It Simple

I couldn’t believe the first time we did our meal plan with my newly prepared recipe folder it only took five minutes! Over the weeks I learned what did and didn’t work and came up with some techniques to keep us on track without meal planning goals. Instead of getting stressed over what three meals a day we’d make, we kept it simple.

We made easy things for breakfast like toast, cereal, or had yogurt.
For lunch, we brought our leftovers to work, which once we started cooking at home leftovers seemed to be in abundance.
For dinner, we would cook on the nights we were home and if we were extra prepared, we would make double and save ourselves cooking an extra night the next day.

Of course, we still ate out and bought our lunch occasionally, but we felt so much more organised with our meal planning than we had previously and didn’t feel the need to run and get takeaway. We were prepared.

Beginners Guide to Meal Planning

If you want to try our meal planning for yourself and your family, check out these 5 simple steps:

Step 1. Decide on the meal plan frequency

Decide what planning schedule is most convenient for your family. Do you like to buy in bulk and do a big shop once a month or are you more of a take-it-in small chunks kind of planner? Set your meal plan to weekly, fortnightly, or monthly – whatever suits your pay cycle or shopping preference.

Step 2. Check your schedule

Use this printable, a whiteboard, notebook, or anything else to write down what days you will and won’t be at home to eat for the week ahead. Put a cross on the days you will be out of the house.

Step 3. Assess your meal options

Go through your pantry, fridge, and freezer and check what food you have to work with and what meals you can make from them. If there is something you bought a while back and it is close to expiring put that option on your meal plan now. Check your recipe folder or books for meal ideas for some inspiration.

Pick your meal ideas and write them on the days that you need to cook. Here is a Weekly Meal Planner Printable you can print out and use. Be sure to consider what days you need something easy and quick and what days you might have the time to put on the slow cooker or prepare something a little more time-consuming and plan your meals accordingly. Don’t forget to check your local grocery store catalogs for current specials to save you money.

4. Write your shopping list

Armed with your meals list, check each day and write out a shopping list of what you need to buy to make up those meals. Recheck your pantry, fridge, and freezer to see what you need to get from the shops and leave out anything you already have at home. You are only buying the ingredients to fill in the gaps in your recipe. Don’t forget to be creative and think outside the box. If you don’t have mince in the freezer maybe you can make some vegetarian tacos this time instead.

And most importantly, only buy what you need for your allocated meal period, if it is a week only buy food to use up over the next 7 days. If you do end up buying extra because some items were on special, make sure you use them up in the next week’s meal plan and spend less on next week’s budget.

5. Stick to your shopping routine

Make a new habit of shopping for your list on the same day. It might be every Thursday night or every second Sunday afternoon. Try to stick to a routine with your shopping so you know exactly what you need to shop for and when. Avoiding hitting the shops multiple times a week will save you on unnecessary purchases.

Start saving money today with your Weekly Meal Planner Printable!

Meal Planning Tips:

Here are some extra meal planning tips that will help you on the way!

• Include your family in the meal planning process. There is nothing worse than planning a meal only for everyone to complain about it on the day, after all your effort planning, shopping and cooking. Perhaps you can give everyone a choice once a week of what they’d like on the menu to keep everyone happy.
• Put a reminder in your phone for when you do your meal planning so you don’t forget to do it.
• Keep a master list of recipes and ingredients close to your kitchen or office so you can quickly glance at the ingredients for your favorite meals when making your shopping list and avoid forgetting anything!
• Keep your meal plan in sight, such as on the fridge or your command center so everyone can see it. This will also avoid the ‘what’s for dinner’ question every day 😉
• Avoid overcomplicating your meal plan. Don’t feel like you have to plan a month in advance, just stick to a week if that is easier for you. Stick to 10-15 simple recipes that you can cook on a rotation and save the new or more time-consuming meals for special occasions or times when you have the energy and motivation to cook something more exciting.

This week’s question: Do you meal plan at home? What tips do you have to make the process even simpler? Please share your tips and tricks in the comments below 🙂

If you found value in this post I would be super appreciative if you could share it with others who might also find value in it 🙂

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Budgeting

How to Communicate With Your Partner About Finances

Posted on February 20, 2018

Have you ever felt overwhelmed by the financial stresses in your relationship and struggled to effectively communicate with your partner about budgeting and finances? *Raises hand*. Financial discussions with your loved one can cause stress and anxiety, but if left unresolved can cause more serious financial woes and long term unhappiness in your relationship.

Maybe you are the one who carries the bulk of the financial stress on your shoulders because you feel your partner has enough to worry about? Perhaps your partner doesn’t want to hear about financial issues or they don’t even know there are issues as they assumed you have everything under control? By being open an honest with each other you can remove the guesswork out of your financial security and get the reality of your finances out in the open so you can both start working together on a plan of attack.

Money can be one of the biggest make or break things in a relationship. Relationships Australia 2015 survey found that 7 out of 10 couple report relationship tension as a result of financial woes and stress. Finances are not something that should be pushed under the rug or left alone to cause endless stress in your relationship. Ignoring them will not make the bills disappear but make them harder to deal with when the time comes to pay them… and it will come.

Even though at first, it may be a difficult and awkward subject to discuss in the beginning, you will have more of a chance to achieve your financial goals when you are both on the same page working as a team. Don’t struggle alone when you can both be working together tackling your debts and achieving your savings goals head on. Just like having a gym buddy to hold you accountable for going to the gym and finishing a set, having your partner on your team will help keep you accountable to your financial goals.

Even if you aren’t married and have separate finances that doesn’t mean that you can’t both be on the same page when it comes to money and will certainly give you a head start if you relationship does progress to something more down the line.

Here are they are: 9 Tips On How You Can Communicate With Your Partner About Finances.

How to Communicate With Your Partner About Finances

1. Set a time to meet and discuss finances
Avoid leaving financial discussions with your partner to what you can yell over the TV ad or what discussion you can get in before you are interrupted by the kids. The best way to communicate with your partner about finances is to plan some time to get together and talk about your future goals and current finances in a quiet place so you can both focus and not be under other pressures or distractions. It can be be a over a home cooked meal when the kids are out for the night or morning (if you have kids) or out on a date night over dinner, it doesn’t matter just find a spare hour somewhere in your schedule to chat about your finances.

Don’t forget to let your partner know in advance that the purpose of meeting is to discuss about finances so they aren’t blind sided. After the first one, make it a regular gig. Set a monthly reminder to sit down for half an hour to talk about your budget each month and how you are progressing towards your goals.

2. Approach the conversation from an understanding and non-judgmental zone
When you try to open a dialogue and communicate with your partner about finances, don’t assume the worst or treat the meeting as an opportunity to bring up every unacceptable expense (in your eyes) that you have been bothered by in the past. You may find that your partner actually agrees with you on getting your finances in better shape and completely acknowledges what your financial problems are. They might have even been thinking the same thing and weren’t sure how they were going to bring it up with you!

Sometimes they are even aware of their own spending problems but don’t know how to change their spending habits and need a plan and your support in order to help keep them on track. Approach any conversations calmly and with the intention to work as a team, not go on the attack and lay blame on your partner. Acknowledge that you might even have your own over-spending areas that you need to work on and be honest about these to your partner. Leave the mistakes in the past, and focus on what changes you can make in the future to reach your financial goals.

3. Know your why
Get on the same page with your goals. Budgeting isn’t meant to be about torturing yourselves indefinitely and saying no to anything and everything that is non-essential expenditure. It is about making your goals and dreams come to life. How far away that is will depend on your current state of finances. If you are swimming in credit card debt and other loans with little in the savings account it may take a while for you to see that you are making progress on your debts but you will get there with a little bit of determination. And there is nothing more motivating that having future plans written down and at the forefront of your mind. These goals are what are going to keep you on track during those times when you want to quit.

Write down your joint future goals:-

Do you want to go on a family holiday next year?
Be debt free so you or your partner can cut back hours at work or for you to spend more time with the kids?
Are you wanting to stop living week to week?
Or remove the anxiety you feel about your finances and get an emergency fund built up?If you are both on the same page you will have more motivation to stick to your financial plan for the long haul. Put your goals somewhere where you can see them such as a Financial Vision Board or on the fridge so they are there to remind you of why you are doing this.

4. Acknowledge the finance problem areas
Now that you’ve got your financial goals written down and you’re excited to take the next step in your financial freedom journey, it’s time to acknowledge the problem areas. If you are hiding debt, bills or anything from your partner, now is the time to come clean. A genuinely honest relationship includes being open an honest about any debts that you may have or spending habits that you know are not helping you achieve your financial goals. If there are any pressing financial issues bring them up and be ready to hear them. Take a deep breath and appreciate that your partner is being honest with you and starting to communicate.

Acknowledge that your budget issues are not going to be something that you can fix in a night or a week, or possibly even a year. This is going to be a long-term process that will take time to work at. Be patient with each other as you slowly replace your less-than-ideal spending habits with more intentional ones.

A good place to start is reigning in the expenditure that won’t hurt so much. Cancel unwanted gym memberships or subscriptions to services that you are no longer using, make more of a conscious effort to save electricity where possible, renegotiate your mortgage to a lower rate and commit to only shopping once a week to reduce the amount of times you are stocking up on groceries. None of these measures leaves you feeling any extreme budget pain but the savings will give you a super helpful boost to paying off those debts and speeding up the debt repayment process.

As you progress in your financial journey you can move on to tackling those not so easy spending problem areas. Consider how you can reduce any excessive spending on areas such as:

Overspending on clothing, shoes, accessories
Regular costly dinner outings
Car repayments that you cannot afford
Spending on hobbies that is costing large sums of money
Buying coffee multiple times a day, every day

Don’t try to tackle the problem expenditure all at once. Pick one and go from there. Maybe this month instead of buying coffee each day you could bring your own from home or make one at work. Next month you can limit your expensive dinners to once or twice a week and cook at home more. The following month you could adopt shopping at thrift stores instead of buying everything brand new. These small changes may seem unimpressive on their own, but when you add all those savings together it can really add up! Over time you will build your budgeting muscles and find new ways to save.

5. Plan your budget
Your budget needs to be something your partner and you both agree on. Think of it like taking on a new commitment, you both have to sign on the dotted line. By leaving your partner in the dark about finances they may think things are rosier than they are and that is not going to work now that you are a team! With the numbers in black and white you can both be on the same page and work together to dodge any budget pressures that come up.

Don’t misconstrue that being on a budget will suck the joy out of life. It is a tool to make your life easier, with the end goal being what you want it to be! More time, regular holidays or an emergency fund, whatever your financial goals are. Be sure to allow individual and joint fun money in the budget (we’ll go into that below) to ensure your budget is realistic and that you will not set unrealistic expectations and fail before you start.

Over time you will get better at finding frugal ways to have fun such as going for a long walk or bike ride together, inviting your family over for breakfast, going to the beach or inviting friends over for a night of board games. If you think you can’t have fun without spending money you have tried hard enough 🙂

To help you get started, you can download my Budget Worksheet here. Don’t forget to include those often missed budget expenses like your Spotify and Netflix membership, house repairs or beauty treatments!

6. Set an allowance for you and your partner.
This is a great tool and bound to save you lots of arguments over spending by yourself and your partner that you both probably will never agree on (I am a non-coffee drinker, the hub loves his daily coffee, I’ve come to terms with it ‘;)). We are all individuals, with our own interests, hobbies and wants, use this allowance avoid explaining to your partner every purchasing decision you make.>

Having $0 for ‘free spending’ to do as you wish is not going to work, nor is questioning every dollar your partner spends. Set an allowance based on what your budget will allow. It could be $50 or $100 a week to spend each, whatever you both agree on and stick to it. This gives you and your partner the autonomy to spend it as you see fit. If you have kids you can add in a small allowance for them, it will be a great start to teach them about budgeting and saving!

It also takes some of the guesswork out of budgeting and makes it easier to stick to your goal. Withdraw your weekly allowance in cash or keep it in a separate account for each of you so it is easy to keep track of. Simply check your wallet or bank balance and you will know what is left. Great for those who aren’t that great at keeping track of their spendings or remembering to enter them into an app or notebook. Of course if you don’t spend it all you can save it up to buy something you really want down the line!

At the same time set up a joint spending account and allowance so you have some money each week to go out on a date night or day, or to catch up with friends. After a while you will get into the routine of what you can and can’t afford and sticking to your budget will become less of a struggle.

What about expensive hobbies?
If you or your partner have some big spending categories, this might also be a good time to set other budget allowances for those expenses to keep them in check. If you love shopping for new outfits, maybe you can set yourself an annual allowance on what you are allowed to spend on clothing. This can work for any expense; concerts, hobbies, beauty, new tools etc. This gives you the permission to spend guilt free on those items when they are in budget and helps to keep you conscious of when you are overspending on those categories.

7. Be considerate and honest
I’ve heard horror stories of partners going out and buying new cars without speaking to their spouse first. This kind of thing makes me cringe. Agree to avoid making large spending decisions without consulting with your spouse first. If you have shared finances and even shared debt, you should both be on the same page with spending. It can be helpful to agree on a threshold as to what you need to discuss together before buying something.

You don’t have to ask permission to buy every single item, how exhausting would that get! I’m suggesting to consulting your partner before buying those more expensive items. Such as a new appliance, phone or piece of furniture for the home. Even ignoring the financial aspect, it can’t hurt to ask for their opinion on something you want or need they made have some great advice or suggestions to offer, and it is particularly handy if it is something for your home (I’ve certainly unknowingly bought some things home that were deemed “ugly”).

8. Get Educated
Open your mind to new budgeting tricks and tips and financial strategies. If you are short on time listen to an audiobook on your commute to work or on your next shopping trip – wherever you can. I recommend listening to (or reading) Scott Pape’s Barefoot Investor and Dave Ramsey’s Total Money Makeover which have some great strategies to get your started on your new financial journal.

It’s something that might get you more open to talking about finances with your partner and get you both excited about your new financial path! If your partner wouldn’t date touch a finance book, don’t push the issue. You can sometimes effectively communicate with your partner the message of what you are reading just by discussing your favourite parts of the book with them.

If you sign up for my mailing list you can also get your free copy of my eBook “101 Ways to Save Money Whilst Still Living Awesomely!”. Reading about finances might not be the most enjoyable thing for everyone but listening to a few financial gurus will open your eyes and ears to things that may make achieving your financial goals that much quicker!

9. Be patient
You might not be on the same page at day one or day 100. Sometimes people need more time to grasp new ideas and lifestyles and long-term support in order to do so. I’ve listened to many Dave Ramsey Debt Free Scream stories where people had read the Total Money Makeover books years earlier and yet only started to change their habits after years of thinking about. Or it took their partner longer to get on board but once they were they were a strong team.

It might not happen as quickly as you would like but over time you will learn how to effectively communicate with your partner. In the meantime you can always lead by example and start making changes to your own spendings such as reigning in grocery spending, skipping the drink at lunch and just bringing your water along with you and finding more frugal ways to catch up with friends such as skipping lunch and going for a walk instead.

Find what your partners passion is and what they will be willing to change their financial habits for. Go back to your why and find out theirs. Sometimes the only thing they need to hear is that it would make your family more financially secure and both of you happier to get them motivated to start on the financial journey with you.

Don’t forget to be a little flexible. Maybe your loved one won’t give up their monthly gym membership for the budget, their Audible membership or their daily coffee but hopefully they will be willing to make other changes to get you to their goal and be more proactive in reducing expenditure such as taking more notice and filling up on cheaper fuel days or cancelling their unwanted memberships.

When the above measures aren’t helping

Of course there are instances where no amount of discussion or understanding can get your partner on board with your financial goals. If your efforts to budget and get ahead are met with constant resistance you may need to consider other issues that are present. If your partner is facing issues with addiction e.g. drugs, alcoholism or gambling, attempting to adjust your budget may not be met with encouragement and make your efforts come undone.

I won’t go into that situation in too much detail as this is a finance blog and I am no psychologist, but I will mention that if you partner is constantly resisting and attempting to tear down your efforts to get ahead, that it may be time for them to seek help with those issues, or for you to reassess the relationship and whether it is in line with your long-term values. This article written by The Minimalists may help you with how to approach a relationship with deteriorating communication.

Do you have any tips for how to effectively communicate with your partner and approach budget and finance conversations? Please share them in the comments below 🙂

If you found value in this post I would be super appreciative if you could share it with others who might also find value in it 🙂

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