Someone told me a few weeks ago that someone else told them (do you follow?) that Will and I are going to be millionaires by the time we're 40.
Wowza!
Can you believe it?
I sure can't!
Wowza!
Can you believe it?
I sure can't!
While we will have had a total income of $1,000,000 by the age of 40, we will by no means have a net income of 1M. And if you go by Google's definition of having assets worth one million dollars or more, I can't confidently say where we'll be in only 18 years from now.
But, what's our trick?
Why do people think we're going places?
Why do people think we're going places?
In the Financial Peace University course that we took in 2017 we were taught to, "Live like no one else, so that you can live like no one else."
Make sacrifices now that other people might not be making, so that in the future you can enjoy a life of financial freedom which most other people own't be in a position to.
We have taken Dave Ramsey's words with a heap of salt and applied them to our own unique situation. Ramsey's course is designed more towards getting out of debt and going up from there. Will and I, thankfully, haven't had student loans or credit card debt so certain aspects of the course didn't apply to us.
Just because we don't have debt doesn't mean that we have tons of spare change jingling around either.
We've adapted Ramsey's principles to suit us and found these 3 umbrella phrases which help us stay out of debt, have money to invest, and build savings.
**Disclaimer!!!** All monetary amounts used in this post are figurative and just used as examples.
We have taken Dave Ramsey's words with a heap of salt and applied them to our own unique situation. Ramsey's course is designed more towards getting out of debt and going up from there. Will and I, thankfully, haven't had student loans or credit card debt so certain aspects of the course didn't apply to us.
Just because we don't have debt doesn't mean that we have tons of spare change jingling around either.
We've adapted Ramsey's principles to suit us and found these 3 umbrella phrases which help us stay out of debt, have money to invest, and build savings.
**Disclaimer!!!** All monetary amounts used in this post are figurative and just used as examples.
Tell Your Money What To Do And Stop Feeling Broke:
1. Recognize Seasons Of Sacrifice
Sacrificing is difficult. It is important to acknowledge when times are rough. It is also crucial to set a timeline for how long you will be in this place. Accept where you are, but know it's not for forever.
Here are some sacrifices we are experiencing right now to give you an understanding of what I mean:
a) Will and I are in a very long chapter of transitioning! Since Sept of 2018 something new is always happening! We know that we will continue to be in a transition period until Spring of 2020. And that's okay. Lots of things are changing and impacting us in different ways. But we are expecting by Fall of 2020 things will settle down a bit and be a little calmer.
b) We currently have a loan we are paying off. It's only a temporary thing that will be paid off in the next two years but it's an added expense that we've signed up for. We aren't stuck with it for an indefinite period of time. We have a goal set as to when we'll have it all paid off, and we're looking forward to that day.
c) We are right smack-dab in the middle of moving. And our rent is about to increase by 46%.... 😢ðŸ˜ðŸ˜¢ Oooh yeah... That burns.... BUT we have agreed that we'll try it out for one year. See how we're doing financially and then re-evaluate. We have an end goal set.
Sacrificing is difficult. It is important to acknowledge when times are rough. It is also crucial to set a timeline for how long you will be in this place. Accept where you are, but know it's not for forever.
Here are some sacrifices we are experiencing right now to give you an understanding of what I mean:
a) Will and I are in a very long chapter of transitioning! Since Sept of 2018 something new is always happening! We know that we will continue to be in a transition period until Spring of 2020. And that's okay. Lots of things are changing and impacting us in different ways. But we are expecting by Fall of 2020 things will settle down a bit and be a little calmer.
b) We currently have a loan we are paying off. It's only a temporary thing that will be paid off in the next two years but it's an added expense that we've signed up for. We aren't stuck with it for an indefinite period of time. We have a goal set as to when we'll have it all paid off, and we're looking forward to that day.
c) We are right smack-dab in the middle of moving. And our rent is about to increase by 46%.... 😢ðŸ˜ðŸ˜¢ Oooh yeah... That burns.... BUT we have agreed that we'll try it out for one year. See how we're doing financially and then re-evaluate. We have an end goal set.
2. Respect Every Dollar And Give Each One A Name
Learning to appreciate every single dollar that comes into your care is key to being able to to save and spend efficiently. Dropping $10 at Starbucks may seem appealing and while it's only 10 dollars if you are making $20/hr at your place of employment that's 30mins of work you are trading for a coffee.
Spending $100 on a new pair of shoes or an article of clothing? If you're getting BC's current minimum wage of $13.85 then the $100 shopping trip will cost you one day's worth of work!
Sure, it's only five dollars, only 20 dollars, or, only 75 dollars BUT you worked HARD for that money and I BEG you to learn the worth of just one dollar.
The idea behind naming each dollar is one from Dave Ramsey and his Financial Peace University course.
Say you have $1,000.
That money that comes in on your paycheque is called Income.
As you put Income into your bank account and begin to budget you will divide and rename each dollar.
$400 gets the name Rent
$200= Transportation
$100= Groceries
$100= Home Bills
$50= Donations
$50= Savings
$50= Clothing
$50= Entertainment
!An Example!
If you do it this way, each dollar is given it's own purpose, and UNDER NO CIRCUMSTANCES are you supposed to try and rename dollars.
Don't have anything left in your clothing account but want new shoes? Sorry, you'll have to wait until next month.
Really need to get gas but you only have $40 left and your tank needs $60 to fill? Don't fill up all the way or drive somewhere for a better deal.
Make sense?
3. Budget!
Will is a spender and I am a saver. He is a free spirit and I am a nerd. Between the two of us we create balance and a fully (almost) functional household.
I can't imagine how people feel confident in their bank accounts if they are not sticking to a budget.
I guess ignorance truly is bliss and if you just spend in denial all the days of your life you will feel like everything is going just fine.
Again, we don't follow Ramsey's budgeting rules to the T. He teaches to project what your income for August (an example) will be and then budget your expenses around that number. For someone who brings home the exact same sized paycheque each and every month this would be easy. But because Will and I have so many sources of income (more on that next week) the dollar value that we bring in in a month can change drastically between July and August.
We budget so that for August we are spending all the money that we made in July. And the earnings that come in during August will be spent in September.
That way if we are expecting to earn $3000 in August and we spend $2990, only to actually bring home $2500 by the end of the month, then we are not in debt.
If we earned $3500 in July then we know we have $3500 to name and allocate throughout August. And if we only gain $2500 in August, although we spent $3500 it won't negatively affect us. Just means that we will have $2500 to budget in September.
I hope that makes sense. Feel free to ask me about it if it doesn't. It really is a great system and has greatly helped us.
We are no where near to being millionaires and while we aren't broke, these three mentalities are what help us to be the manager of our money and stay ahead.
This picture from our recent trip to Victoria is proof that we're staying on top of our finances. I wouldn't suggest dropping more than 4 figures on weekend vacations regularly, but it is definitely important to spoil yourself every once in a while. 😉
Spending $100 on a new pair of shoes or an article of clothing? If you're getting BC's current minimum wage of $13.85 then the $100 shopping trip will cost you one day's worth of work!
Sure, it's only five dollars, only 20 dollars, or, only 75 dollars BUT you worked HARD for that money and I BEG you to learn the worth of just one dollar.
The idea behind naming each dollar is one from Dave Ramsey and his Financial Peace University course.
Say you have $1,000.
That money that comes in on your paycheque is called Income.
As you put Income into your bank account and begin to budget you will divide and rename each dollar.
$400 gets the name Rent
$200= Transportation
$100= Groceries
$100= Home Bills
$50= Donations
$50= Savings
$50= Clothing
$50= Entertainment
!An Example!
If you do it this way, each dollar is given it's own purpose, and UNDER NO CIRCUMSTANCES are you supposed to try and rename dollars.
Don't have anything left in your clothing account but want new shoes? Sorry, you'll have to wait until next month.
Really need to get gas but you only have $40 left and your tank needs $60 to fill? Don't fill up all the way or drive somewhere for a better deal.
Make sense?
3. Budget!
Will is a spender and I am a saver. He is a free spirit and I am a nerd. Between the two of us we create balance and a fully (almost) functional household.
I can't imagine how people feel confident in their bank accounts if they are not sticking to a budget.
I guess ignorance truly is bliss and if you just spend in denial all the days of your life you will feel like everything is going just fine.
Again, we don't follow Ramsey's budgeting rules to the T. He teaches to project what your income for August (an example) will be and then budget your expenses around that number. For someone who brings home the exact same sized paycheque each and every month this would be easy. But because Will and I have so many sources of income (more on that next week) the dollar value that we bring in in a month can change drastically between July and August.
We budget so that for August we are spending all the money that we made in July. And the earnings that come in during August will be spent in September.
That way if we are expecting to earn $3000 in August and we spend $2990, only to actually bring home $2500 by the end of the month, then we are not in debt.
If we earned $3500 in July then we know we have $3500 to name and allocate throughout August. And if we only gain $2500 in August, although we spent $3500 it won't negatively affect us. Just means that we will have $2500 to budget in September.
I hope that makes sense. Feel free to ask me about it if it doesn't. It really is a great system and has greatly helped us.
We are no where near to being millionaires and while we aren't broke, these three mentalities are what help us to be the manager of our money and stay ahead.
This picture from our recent trip to Victoria is proof that we're staying on top of our finances. I wouldn't suggest dropping more than 4 figures on weekend vacations regularly, but it is definitely important to spoil yourself every once in a while. 😉
Great blog post Aleana!!
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