5 Down, 3 To Go
I’m about 5 months into Project Money and I’ve been blogging about a lot of financial changes from planning a stress free staycation to saving money at the grocery store and how to handle unexpected expenses. Early on in my blogs, I talked about how my money mindset was slowly changing, for the better.
This past week, Summit released how much my savings has increased and my debt decreased, but I try to focus less on the actual numbers and more on the process. Because the hard numbers only tell part of the story.
To illustrate that point, I found a quiz on Twitter titled “How Good Are You ACTUALLY with Money?” The point of the quiz is to find out your actual money skills and what you should be focusing on to get better.
So first, I answered the questions based on where I was 6 months ago: pre-Project Money. Not surprisingly, this is what my pre-Project Money quiz revealed – “you’re struggling”. The results went on to say that if you are struggling with debt (which I definitely was), you should try these tips:
- Divide cash between debt and savings. It may be tempting to pay down debt as quickly as possible, but if you don’t start to build up a savings simultaneously, you may just end up back in debt as soon as you pay it off. This is exactly where I was before Project Money.
- Divide cash into TWO checking accounts. Consider having two checking accounts – one for paying bills and one for spending. That way, you don’t spend money on Starbucks that’s already ear marked for the mortgage. For example, for me, this idea from my coach Melanie early on in Project Money was simply genius!
Then I took the test again and answered the questions based on where I am now, 5 months into Project Money. My results were this: “you’re coasting”. How fitting this is in light of my very first blog about the Project Money roller coaster ride I was about to get on! My results went on to say that while I may not feel totally in control of my money yet, I’m on my way to financial freedom. This is spot on! So, if you are feeling not quite in control of your finances, but almost there, consider making some tweaks to your money mindset and your money habits.
My results went on to say that financial freedom usually doesn’t occur as a result of more income. So, before thinking that more money automatically means more saving, consider the following:
- Do you know your net worth? Think of building assets. Think roots vs wings from one of my previous blogs. If you are a Summit member, you can figure out your net worth using Money Minder.
- Save before you spend. Easier said than done, right? This has been one of the most challenging parts of my shifting money mindset. Is what you are buying a want or a need? Six months ago, the question I was asking myself instead was, “Is what I am buying a want now or a want later?”
- Divide cash into TWO checking accounts. Hmmm, where have I heard this before?
Here’s this week’s financial fun fact: when you are working toward a financial goal like, I don’t know, saving for a wedding or trying to pay off your credit card, don’t get too stuck on the numbers. Yes, the numbers are clearly important, but it’s what you learn in the process of achieving that goal that will sustain you over time, help you develop new savings (and spending) habits, and improve your money mindset.
If you are interested in taking the “How Good Are You ACTUALLY with Money?” quiz, you can find it here: https://www.dailyworth.com/quiz/how-good-are-you-actually-with-money
With only 3 more months in Project Money to go, I’m coasting toward that finish line to financial freedom.