This is the last post in this series and I’ve loved writing it.

I wanted to end off with a post to really challenge your thinking. I could write about tips and tricks to stretch your money … which a lot of the personal finance bloggers already do very well… but at the end of the day I want to leave you with two thoughts:

1. the point of managing your money well is to support YOUR definition of financial freedom, or YOUR financial goals
2. Therefore, each person’s how-to will look very different because each of our priorities are different

Just as I do with all my coaching, I want to encourage you to find your specific style.

What are the things that bring you joy and make life worth living? Spend on those things.

At work the other day someone mentioned having spent an unbudgeted amount at a friend’s book launch. You could come at this from two angles:

1. you’re not supposed to veer from the budget AT ALL, or
2. spend on the book launch because the friend matters to you and save somewhere else (she brings her own lunch and snacks to work every single day)

I manage my cell phone bill verrry tightly, buy a few new items of clothing maybe 3 times a year and drive an old 2005 car but my savings account is healthy and I’m always happy to spend on travel 🙂

Can you think of your financial priorities like this?

Stop comparing your situation to those of your friends or colleagues.

Firstly, you don’t know exactly what’s going on in other people’s business and secondly, it’s just not healthy! Live your own life according to your values.

What are some of the things you prioritise over others?

PS 10 steps to your financial freedom will be on sale for the next 24 hours only. Get your copy now 🙂

This is, undoubtedly, one of my “secret tips” with regards to money and finances. Something I started doing when we first bought property – I think we were married 3 years so that’s about 15 years ago.

Keep your lifestyle constant even when your salary increases.

I’ve always worked for companies where we received annual increases and at most of them, even an annual bonus.

What people typically do is increase their spending when their salary increases.

Can I share a confession?

I’ve only given myself 3 or 4 increases over those 15 years.

Let me explain.

Every time my salary increases, I pretend nothing’s changed.

I increase my tithe and my savings by the exact amount of the increase (so if 6%, then 6% all round), and the rest used to go into our bond (our house has been paid off for about 2 years now – that was a big, hairy goal in 2011). That’s mostly how we paid off our houses lickety-split. Our plan was always at most 8 years per house but we aim for even earlier.

Dion and I both have discretionary income – that means we have an amount of money that doesn’t need to be explained anywhere. So I can buy handbags and he can buy books and CDs 😉

It’s this amount that I very rarely increase. I increased the amount a few months ago after about 3 years, the previous amount was constant for about 3 years too, and before that, I was on the same number seemingly forever. But it’s worth it because I have my big goal in mind at all times.

So tell me…

Do you have a set amount for discretionary income? How often do you increase it?

What’s your secret vice?

PS This is the last week the 10 steps to your financial freedom e-course will be on sale. Get your copy now 🙂

Now and again in conversation the topic of savings comes up.

A lot of people still think that it’s a good idea to wait for the end of the month or just before you get paid, see what’s left of your salary and then transfer what’s left to a savings account.

I tried that for a few months about 16 – 17 years ago and it never seemed to work. There was just no money left… ever.

Either I wasn’t earning very much (that’s certainly true) or that behaviour didn’t work for me. Probably both 🙂

I then switched things around.

When I got paid, I paid my tithe first before I did any other spending. I like God to get the first of my money.

And then the next transaction is to transfer another amount to my savings account.

After those two transactions, the rest falls into place, but those two are sacred.

I’ve been doing that every month for the last 16 – 17 years. Tithing for 19.5 years though.

And I love love LOVE seeing my savings account grow.

I do have some investments but after reading Lois Frankel’s book, I need to do more.

We don’t have a good savings culture in South Africa (I just did a quick google and I see 67% of us don’t save) so don’t feel bad if you’re not saving. The point is, don’t be content with that situation. Start small but take that money off the top.

Way back when (in the olden days :)) I think I started with R50 a month and these days I save…. a whole lot more than that 🙂 The thing is I got addicted to seeing my savings account grow and that’s when it became easy for me.

Do you save?

Is it easy for you? When did it become easier?

 

We’ve all heard the saying “you can’t manage what you don’t measure” and boring as that sounds, it’s true.

Pre-kids (also known as the days when I had LOTS of time but didn’t appreciate it) I would do a clean out of my wallet and balance my receipts against my account on my spreadsheet (!) every week.

I knew exactly how much money needed to be in my account at any given date in the month because of which debit orders should have gone off my account.

And then I had the babies.

While they were little and I was on maternity leave, I was actually still very good with all of this but it got a bit worse once they were 5 months old and I went back to work.

These days I aim for twice a month.

Most months that works fine but when I have a crazy month, I only manage to balance the budget once, right before or after I get paid.

During this time, I make sure that everything spent is accounted for somewhere. I also make sure that the actual amounts in our savings accounts tally up with my spreadsheet and that all the debit orders have gone off for the correct amounts.

This month I noticed that my retirement annuity’s annual 10% increase kicked in and so I adjusted my budget. By the way, when I first took out that policy, I was paying R200 pm. I’m paying nearly three times that initial premium now.

I may be showing my nerdiness now but there’s nothing quite like it when everything is nicely balanced and all the numbers correspond.

It’s like looking at an organised space in my house – a feeling of peace and satisfaction 🙂

How often do you balance your budget and review your finances?

Do you have your copy of 10 steps to your financial freedom yet? Remember, it’s only $10. Thanks so much for your support.

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If you love a plan as much as I do, when snags come up, it can be… well… frustrating.

Some things that come up will be expected but annoying, like the once-a-year TV and car licences, annual increases to your insurance, medical aid, and so on. These are more or less the same amount – 10% increase annually – so don’t catch you entirely off guard.

Other obstacles are totally unexpected like car trouble, unexpected medical expenses like the one year I had to have lots of x-rays before a (mostly) routine operation and my medical savings was done in March of that year….

And sometimes there’s a mixture of both expected and unexpected – the expense is expected (school fees) but the extent is unexpected. Like when you take your car in for a “routine” service and end up paying a couple of thousand IN ADDITION TO the cost of the service.

I like to tell my clients that if you know something is normal, it feels like it’s part of the plan and not your fault.

So know this – for any goal, you are going to have obstacles.

You can take it as fact.

How, then, do you deal with it?

It’s quite simple – you have to keep your vision clear, keep persevering and keep working that plan.

The obstacle doesn’t have to be a setback; it’s just a little detour in the road.

That’s how I see it anyway.

Coincidentally, as I was writing this post, I had a little financial detour – my car’s battery had to be replaced to the tune of R1200.

Annoying but I’m going to pay and get on with my financial life.

Do financial obstacles generally throw you off track or how do you deal with them?

There are two types of people in the world – those who just talk about things… and those who make things happen.

I like to think I’m in the second bunch.

Thing is, I hear lots of people say they want to live without credit, travel more, pay off their bond, etc, etc. but not many of those people will get there if they don’t have these 5 things in place:

Clarity of vision

You can’t be fuzzy about your financial goals. Your vision should be as clear as if it is already reality.

Many years ago my husband and I decided to buy our first property. We looked around and realised that we needed a 10% deposit as well as the transfer and attorneys’ fees. These were the days before they decided to make it easy for first-time buyers. It was far more than we had in savings so we put our dream on hold for a bit. However, our vision was very clear and over that next year we saved like crazy and bought our first property “on time”, exactly a year later.

Perseverance

Once you know where you want to be, you don’t let go of that vision and the work to get there…ever. It’s hard when all around you people are “living it up” even if sometimes living it up just means eating out occasionally. That’s the ideal time to remind yourself of your dream.

Impatience is good

I think this is the one place where it’s good to be impatient. I’m an impatient person but I get SUPER impatient when I’m close to achieving a financial goal. It’s almost like the end is so close I just can’t wait anymore and so I work super hard and usually do it in just a month or two.

I’ve paid off my last two cars like this when the end was in sight (another 6 months to go).

 

Flexibility

I talk a lot about this in the goals pack but you need to be nimble to navigate obstacles and… let me warn you, obstacles always come.

You’re this close to paying off an account when suddenly you need new tyres on your car or some extra x-rays not covered by the medical aid.

Don’t let these unexpected expected expenses (!) derail you – it’s just life, not a lesson to teach you you’ll never be debt-free.

Keep focussed and work your plan.

 

Relentless pursuit

This point might sound a bit like perseverance but it’s not. Perseverance is keeping on while relentless pursuit means to actually chase after something with single-minded focus.

That could mean selling one car and sharing a car with your husband so you can pay off your debt faster.

It could mean maintaining your standard of living even while getting salary increases and bonuses.

 

The beauty of a financial dream is that the harder you work at all of these things, the shorter the time you have to do it.

If you dibble dabble, however, you may be stretching towards your goal forever.

 How long (realistically) have you set to work towards your financial goals?

PS Our next financial goal is to take an overseas holiday with the kids next year when they’re 5. I’m leaning towards Thailand… 🙂

PPS Do you have your copy of the Financial Freedom course yet?