The majority of us ‘act our age’ for the most part. It’s no surprise as aging is part of the human condition and in many aspects creates a certain structure for our thinking.
For example, many of us think in life-stages like:
- Your 20s are for fun and establishing a career (debt and little saving)
- Your 30s are for raising a family and growing that career (more debt but beginning to save)
- Your 40s and 50s are helping children into adulthood and for achieving mastery in a career (reducing debt and saving increasing amounts as retirement looms whilst hoping to win big on the lottery)
- Your 60s are for retirement and beginning of a new life post-work (spending those savings in the ‘golden years’)
For most of us here, our busy lives are a blur between long hours at work and play. With all the time spent on education, pursuing and growing relationships and of course time dedicated to fun, the state of our finances are never seriously considered. And our finances are not helped when for some of us a night out is judged depending on how much money is left in our wallets!
Don’t act your age
Continuing with these assumptions, if you’re reading Magical Penny you are a little different as you are paying attention. Most young people are not.
I want to challenge that.
If more people understood the true implications of beginning to save and invest early, I am confident that more people would begin paying attention as the potential rewards for diligence in saving and patience in investing are mind-blowing.
But still not everyone around you will ‘get it’. You could try shouting…
“THINK OF THE COMPOUNDING RETURNS!!!!!”
…at the top of your voice, but believe me when I say:
It won’t work.
Even with good vocal projection.
For some weird reason it’s simply not effective.
As you begin to understand the significance of being more conscious of your spending, you will hopefully be making small or large changes in your life and to your relationship with your wallet. You may find that if you are serious about getting out of debt for example, you become less enthusiastic about going on that expensive weekend away.
Here are 4 ideas that I have found helpful to keep you on track as you make the active choice to grow your pennies for your future:
Be confident in your budget, not embarrassed
You may need to curb your spending to follow your realistic budget. The worst thing that you can do now however is let your newly found financial habits and goals be dashed by your friends. If you have begun to change your financial priorities they may laugh or think you’ve joined a cult! But if you are going to attack any consumer debt you have or begin saving your pennies you may need to change some every habits or weekly rituals.
Keep at it.
Remember that you are prioritising tomorrow’s dreams over today’s passing wants and that your friends will soon change their views when they see you put that fat down-payment on a house or have pennies in the bank to pay for that holiday in full before you leave.
Accept your goal will be reality, step by step
You may feel daunted if you have an overdraft to climb out of or a credit card to pay off. But as you bring your spending under control you will need to accept that you have already made massive progress: you are paying attention to your pennies and telling them where to go rather than wondering where they went. Know in your mind that you will reach these initial goals and that in time your pennies will be growing all by themselves.
Re-frame your thinking
When I first began paying attention to my pennies I became acutely aware of all the spending that my friends were doing around me, particularly cars, laptops and other shiny electronics so attractive to early 20 something males! But when you find yourself holding back from such spending remind yourself that you’re not depriving yourself, just delaying your wants a little. By reconsidering your spending now, your pennies will go much further in the future as you give them a chance to grow into more meaningful sums. Remember too that although your friends are spending to fulfil today’s wants, your long-term focus can mean that you can dream even bigger for your future. In simplistic terms do you want a state of the art laptop now or a paid-for sports car when you’re 50?
Leave your friends to their spending
Finances can be a taboo subject: it is deeply personal and spending habits are hard to change. When you begin making progress on your goals it will be easy to become enthusiastic and encourage others to follow suit. In fact, this is one of my major motivators for writing here at Magical Penny!
However this is not always the best approach when speaking with friends and colleagues face to face. Ultimately the motivations for increasing saving and living with planned spending have to come from within.
Everyone needs their own ‘light-bulb moment’.
By all means tell your own story to your friends if they ask it, but let that quiet confidence that a solid financial plan can bring do the real talking. It is important to avoid appearing to be judge other’s financial choices.
This can be hard. It was only last week that I came across this myself as I watched my friends empty their wallets into slot machines. No doubt sparked by the way I must have been looking at them as they fed £10 notes into the machines, I had to reassure a friend that I wasn’t judging them: I simply have my eyes on a bigger prize.
To sum up, I hope these points will help you as you maintain your resolve; to not act like most of our age; to show respect to your pennies in the present for a better future tomorrow (and so you don’t have to rely on the lottery in your old-er age).
Being financially secure at any age is never a bad thing so get to it!