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Don’t Be Ashamed of Mistakes – Just Fix Them
I tell you my story in the hopes that you won’t be ashamed of the money mistakes you’ve made. I also want you to know that you’re not alone in your debt woes, and that no matter how bad it seems, there is always a way out.
I also reveal my story because I want you to take an honest look at your own spending patterns. The financial seminars I do, along with the “How to Become a Millionaire” and “Debt to Wealth” group workshops I conduct, are designed to help people jump start their finances and learn to manage their money. In the workshops, I often ask people to distinguish between things that are “luxuries” and things that are “necessities.” Invariably, one person will cite some thing – be it a good or a service – as a “necessity” that another person believes is a “luxury.”
I then encourage people to gain some perspective on their spending by considering those things that, to them, may seem like necessities, but that to others appear more like luxuries, or even frivolous or downright wasteful spending.
For example, I once told a group of workshop participants that I spend about $300 a month on books. Some attendees were mortified! They gave me all kinds of suggestions (good ones, in fact), about how I could definitely save money by checking out books from the library, reading books in the bookstore, or sharing books with friends, etc. Most people clearly saw my monthly book-buying binge as a luxury – if not a wasteful use of my money – whereas I saw it as a “necessity.”
You’d be surprised at how others might see your spending habits. And because I think some outside perspective can be a big eye-opener, I’d like you to take a moment to do the following exercise.
Gaining Perspective on Your Spending
What’s a luxury? What is frivolous? What is wasteful?
Directions: Take a few moments by yourself to complete the following statements, filling in the appropriate information. Think about things you spend money on that you consider “necessities,” but that outsiders might not view that way.
I now spend $ _______ weekly/monthly/yearly on _______________ something some people may consider a luxury.
I also spend $ _______ weekly/monthly/yearly on _______________ which other people might view as frivolous.
Furthermore, I spend $ _______ a week/month/year on ____________ which certain people could think is wasteful.
Now go ask a family member or friend to read aloud your statements. Then ask him/her to honestly answer 3 questions:
1. Do you think any of the things I am spending money on are “luxuries,” “frivolous,” or “wasteful?”
2. Why or why not?
3. Is there a better way for me to eliminate or reduce these expenses?
After you receive some feedback, put one or two recommendations from relatives or friends into practice if they make sense and if the advice will save you money.
Next – Day 17: Make A Realistic Budget
