In today’s financial economy, many of us are re-evaluating our financial situations and making increased efforts to spend less and save more. As you make these changes, you may find that there are people and obstacles in your life that keep you from meeting these goals…this is what I call your “Crabs in Your Bucket.” Every time you try to make financial improvements, they reach up and pull you back into the bucket with them.
Some of the obstacles that can appear as “crabs in your bucket” are time, money, debt levels/interest rates and even yourself. This concept is all about creating space for the things you want and desire in your life and managing the “crabs” that are keeping you from these goals.
Time: We all wish there was more of it. As we run around complaining about how little time we have, or how late we are, we can often become distracted from our new financial goals. It’s important to devote time to simple tasks such as balancing that checkbook, checking in on our 401K plans or even transferring money into our saving accounts.
Money / Cash Flow: Think back to the time when you earned very little income. Remember how it seemed like you pinched every penny, but there still wasn’t enough? I’m going to bet that you feel pretty close to that today, despite the fact that you make much more money. It has become second nature to increase our standard of living in proportion to our income. It is important to keep your spending at a similar level and increase your savings as your salary increases in order to stay on track financially.
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Debt Levels and Interest Rates: Having debt puts you on the hook for having to work. You have a responsibility to go to work and pay that debt down until it’s paid in full. This causes you to put money in the spotlight of your life which can create much emotional stress. If you are carrying debt, like most people are, take a look at the interest levels. As interest rates have increased over the years, many people have found themselves in a real cash flow crunch because their interest rates were variable instead of fixed. Too many people are paying triple what they used to which gets in the way of your savings goals.
Yourself: We’re all guilty of it. It can be hard to pass up that expensive dinner with friends, take a family vacation, or buy the newest pair of designer shoes. But once you’ve made a decision to improve your financial situations, you need to stick to it and not waive from your goal. Of course, set mini goals and reward yourself (very simply) along the way, but stay focused and you will be surprised at how quickly your savings account can grow!
It’s all about creating the life you want, not living a life you have to pay for tomorrow.
Julie Murphy Casserly, CLU, ChFC, CFP®, is a 14-year veteran of the financial services industry and founder of JMC Wealth Management in Chicago, Julie helps people understand how their emotional attitudes and behaviors affect how they earn, spend and save. She is author of The Emotion Behind Money: Building Wealth from the Inside Out.