I cringe when I remember learning to drive. At fifteen-years-old, I was impatient, full of nervous energy, and so short that I could barely reach the steering wheel. (Which is still kind of a problem, but I digress.)
My parents were backseat driving, of course, instructing me on how to drive the rural, dirt road just outside our neighborhood. “Let off the brake,” they said, and the car began to coast, slowly. Cool, I can handle this, I thought. “Hit the gas,” they said. Chaos ensued.
I swerved into the other lane, and when I yanked the steering wheel to straighten out, the car jerked in the other direction and I almost hit a fence post. My parents shouted. I screamed. All of us were terrified. I felt completely frazzled and out of control. It was like the car had a mind of its own.
For many of us, managing money feels something like this. We try to make a budget and set some limits for our spending, but our financial situation always seems to have a mind of its own: your bank account overdrafts, you get a pay cut at work, your vet bill is considerably higher than you expected.
But just as when you were learning to drive, developing a sense that you're in control can make a huge difference. When I finally felt like I was the one controlling the vehicle, driving became second nature.
Research, like this 2014 study, shows that simply feeling powerful inspires people to make better financial decisions. They develop financial confidence. For this reason, I’m a fan of quick money wins — small achievements that may not make a huge difference on paper, but which do wonders for how you feel about your financial situation. These quick wins won’t make you a millionaire overnight, but they can empower you, and that’s everything.
Quick wins give you financial confidence, and that helps you make better money decisions in the long run. (As the study put it, “feeling powerful increases saving.”)
In other words, change your attitude about money and you can change your behavior with it, which can lead to actually being in control of it. Try your hand at a few of my favorite money wins.
There's something to be said for spending more on a quality item. If frugality is about getting the most value out of something, spending more on quality can actually be thrifty. In a recent post, I admitted that I once splurged on a $200 coat. A couple of readers rightfully pointed out that an expensive purchase isn't always a waste of money. If it is a high-quality coat that lasts years, it may be a better purchase than a cheap $50 coat you replace every season.
Still, there is a fine line between buying quality and using quality as a justification to spend more. Here are a few things I consider before I plop down a bunch of money on a so-called quality item.
Can I find it cheaper?
Apologies for sounding like an infomercial, but quality doesn't have to be expensive. Ever found a big discount on something you know you will use often and that will last years? It's a great feeling! Here are a few ways to spend less on quality:<
For the past two years, the topic of women and money has come up in my life quite a bit. I'm guessing it has something to do with the fact that I'm a woman who writes about money.
But as a woman who writes about personal finance, I feel have given the topic less attention than it deserves -- not just in my writing, but in my own thoughts too. I suppose I figured personal finance is something that we all struggle with, not just women. But the more I learn, the more it hits home, and the more I realize we should embrace the topic so we can do something about it.
The Confidence Gap
Last year, when I read Barbara Stanny's "Secrets of Six-Figure Women," I found myself nodding in agreement to just about everything she'd written. Some of her points were an unsettling confirmation of my own career shortcomings -- particularly, her chapter on the "traits of underearners." A few of these traits: We have a high tolerance for low pay; we underestimate our worth; we're terrible negotiators. Check, check and check.
I get frustrated when people don't understand what it means to be frugal. A few criticisms of frugality I've come across:
Frugality is a waste of time.
Frugality distracts you from earning more money.
Every now and then, I get an email from a fellow writer who's just starting out and wondering where to begin. "How did you do it?" they ask. "How did you make freelance writing your career?"
It's flattering, but what do I say? First of all, I'm still working to reach my own writing goals, so I'm not even sure I'd be the best person to ask. But also, any success that I may have had as a freelancer has at least a little to do with luck. True, it's mostly hard work, but auspicious timing and lucky breaks have also helped my career along the way.
For example, when I started writing for MSN, it wasn't because I worked hard to get their attention and relentlessly pursued their editors. It was also because I had an enormously talented and kind friend who landed a job there, and she happened to be hiring freelancers right as I decided to leave my job to become a freelance writer.
Despite that I don't own it, I like my apartment. It's got a mountainous view, it's comfortable, and my neighbors are few but friendly. Sure, I'd like to own a home someday. But, unless I move to another city, that probably isn't going to happen in the next few years. I'm fine with that. Like my neighbor said, I'd rather live here than anywhere else, at least for now.
If you sense a wee bit of defensiveness in my tone, you're not imagining it. Part of me is trying to justify something.
After my upstairs neighbor moved out a few months ago, our management company began gutting their apartment. We found out they were completely updating it and tearing down walls to put in central air, a dishwasher and an entirely different floor plan.<
A few months before I decided to quit my job and move, I'd made a whole timeline of accomplishments I hoped to reach within the next three to five years. It included a series of backup plans, too, should Plan A not work out (Plan A: become a hugely successful writer, make lots of money, buy a home in Malibu, take many naps). This timeline included mini-goals of what I hoped to accomplish within a month, year, three years, etc. It included a breakdown of expenses. It also included different scenarios. I asked myself: What would it take for me to give up and move back? In short, it was goal oriented and painstakingly meticulous.
Which was fine, but you could read my stress and neurosis all over it. I showed the timeline to a friend of mine, proudly.
It seems like everybody's goal lately is to leave their job and become a freelancer. And that's great! Freelancing gives you flexibility and control -- and, plus, you get to work from home in your yoga pants.
But as someone who has transitioned into that role full-time, there are certain things I do miss about having an employer:
It's both fascinating and useful to calculate the value of your time. Financial freedom gives you options and flexibility. But without time, that means nothing. Time is a precious resource that we should spend wisely.
Knowing the value of your time is helpful for a variety of reasons:
If you're a freelancer, it can help you decide on gigs.
Earlier this year, I started volunteering at my local library for a couple of hours a week. I'm a big fan of libraries, and I wanted to find a way to give back. And for some odd reason, I felt compelled to do something good. I couldn't really pinpoint why, so I chalked it up to getting older.
At the library, one of my duties is to make sure one of the weekly programs doesn't go over capacity. Most buildings have occupancy regulations, and the library is no different. I politely tell people, "Sorry, we're full for this program. But we have another one starting soon."
You'd think people would be understanding, and for the most part, they are. But each week, at least one person throws a fit, says awful things, and then proceeds to tell me they'll report me, a volunteer, for suggesting they wait 15 minutes for the next program.