Doing Some Money Math
It is so much easier to think that the thing we want to spend only a few dollars on today will give us the pleasure we want now and not really make a difference long term.
Well, what if you actually added up some numbers and turned the combined number into something tangible? For example, a $3 indulgence every day is easy to find spare change for. However, $3 x 6 days a week is $18. Still not alot of money, but certainly it could buy a lunch out, or gift for a friend, or perhaps a book, or something fun to wear on sale. If you start looking overseas, $18 can do a lot for orphaned children, or impoverished families.
If you indulge in the spare change treat everyday for a month that's $72. Now, we're talking about a dinner out with a friend, some new shoes or clothes, and a whole lot of good for many worthwhile causes.
Over a year, that spare change indulgence is $864. Now what could you do with that money???
When you start to identify concrete things or expenditures with the larger amount of money it becomes much easier to evaluate and relate to the bigger picture. Then you are more easily making decisions that will support you where you are today as well as in the future.
What if you currently had a $4500 debt on a credit card? At 15% per year that's $675 of interest? What could you do with that money if you had it to spend, or invest or do something worthwhile with?
If your $4500 credit card debt has a minimum payment of $135 per month what would you do with that money if you weren't paying your credit card? Remeber the answer has to be concrete. It's much easier to make decisions if you're not just focused on 'getting out of debt' - boring - not relatable - too generic - you need to be specific!!!
If you pull the spare change $3 indulgence together with the $4500 credit card debt and the $135 minimum payment, you could see the financial math working for you in a great way: If you paid the minimum $135 payment you would have paid a total of $1357 on your $4500 debt. If you added your $72 to that amount, you would pay a total of $817 interest for a difference of $540. Now ask the same question? What would you do with $540??? Remember - specifically - what would you do with that money?
So how do you make this happen - remember it's all a choice - your choice. It's ok to have the $3 indulgence. Just be aware of what you're giving up and accept it as your choice. If you think you might rather have the bigger things from the money, then simply ask yourself, how can you either replace the indulgence, or how can you have the same experience without the money, or how much of the indulgence do you really want, or many other positive enlightening questions to keep you moving towards your ideal financial future.
Just please promise yourself, you won't take this information and start telling yourself that you're an idiot, that you must be undisciplined, or irresponsible. And, please don't ask why you feel you really want the indulgence. Just make the decision and enjoy it!! And if you want to read more on financial math, you can read the one called 'what really happens when rates go up?' at http://www.moneyminding.com/articles_moneyminding.htm
Copyright© 2006 Tracy Piercy. Written Permission is required for reproduction. Thank you.
Well, what if you actually added up some numbers and turned the combined number into something tangible? For example, a $3 indulgence every day is easy to find spare change for. However, $3 x 6 days a week is $18. Still not alot of money, but certainly it could buy a lunch out, or gift for a friend, or perhaps a book, or something fun to wear on sale. If you start looking overseas, $18 can do a lot for orphaned children, or impoverished families.
If you indulge in the spare change treat everyday for a month that's $72. Now, we're talking about a dinner out with a friend, some new shoes or clothes, and a whole lot of good for many worthwhile causes.
Over a year, that spare change indulgence is $864. Now what could you do with that money???
When you start to identify concrete things or expenditures with the larger amount of money it becomes much easier to evaluate and relate to the bigger picture. Then you are more easily making decisions that will support you where you are today as well as in the future.
What if you currently had a $4500 debt on a credit card? At 15% per year that's $675 of interest? What could you do with that money if you had it to spend, or invest or do something worthwhile with?
If your $4500 credit card debt has a minimum payment of $135 per month what would you do with that money if you weren't paying your credit card? Remeber the answer has to be concrete. It's much easier to make decisions if you're not just focused on 'getting out of debt' - boring - not relatable - too generic - you need to be specific!!!
If you pull the spare change $3 indulgence together with the $4500 credit card debt and the $135 minimum payment, you could see the financial math working for you in a great way: If you paid the minimum $135 payment you would have paid a total of $1357 on your $4500 debt. If you added your $72 to that amount, you would pay a total of $817 interest for a difference of $540. Now ask the same question? What would you do with $540??? Remember - specifically - what would you do with that money?
So how do you make this happen - remember it's all a choice - your choice. It's ok to have the $3 indulgence. Just be aware of what you're giving up and accept it as your choice. If you think you might rather have the bigger things from the money, then simply ask yourself, how can you either replace the indulgence, or how can you have the same experience without the money, or how much of the indulgence do you really want, or many other positive enlightening questions to keep you moving towards your ideal financial future.
Just please promise yourself, you won't take this information and start telling yourself that you're an idiot, that you must be undisciplined, or irresponsible. And, please don't ask why you feel you really want the indulgence. Just make the decision and enjoy it!! And if you want to read more on financial math, you can read the one called 'what really happens when rates go up?' at http://www.moneyminding.com/articles_moneyminding.htm
Copyright© 2006 Tracy Piercy. Written Permission is required for reproduction. Thank you.
posted by Tracy Piercy at 1:32 PM
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