There are folks who truly can't afford to make ends meet. Sometimes, though, we say we can't "afford" things when the reality is, we can, we just choose to spend our money on other things. For many of us, the only thing standing in the way of financial progress is our idea of "normal". Woman with money in her back pocket image from Shutterstock
"Normal" gets in the way of our finances all the time. We stick to the status quo without questioning what else could be possible.
For example, back in university when I needed a car, I figured I'd go about it the "normal" way: put a small amount down, take out a loan, then pay it off at a high interest rate for the next five years or so. But my dad made a point that changed my own view of personal finance: "What if you did things differently?" he asked. "What if you paid cash for a car instead? Think of what you'd save in interest over time." So I tried things his way. I went without a car for a while, saved up for a cheaper used car in good condition, and saved a ton in interest.
It never even crossed my mind to not take out a car loan; everyone else had one. But changing my idea of "normal" was an awesome step in the direction of financial progress. In fact, "What if" is a great way to challenge your own status quo assumptions. What if you paid for your car in cash? What if you spent less on groceries? What if you asked for a raise, even though you're just starting out?
Doing the unconventional thing could very well mean you earn more money, save more over time or can actually afford to spend your cash on something that's important to you.
Over at Forbes, Certified Financial Planner Michael Kay discusses this same idea. Kay writes:
...how you define your money normal impacts your life in huge ways: your ability to pay your bills, educate your kids, buy a home or retire in comfort and security.
Some people believe that you save regularly and stay out of debt. Others believe that the future is unknowable, so what the heck? Enjoy today and don't worry about it. We ultimately define our actions based on our habits and what we believe is appropriate or in our best interest...
What is your "normal"?
Does it bring you closer to your happiness, satisfaction, comfort and security? If so, pass it on! If not, perhaps it's time for a new normal…
This is why it pays to be resourceful. Money is just a tool. Rather than using it the way everyone else does, think about the many possibilities of using it to optimise your finances.
You might not be able to pull off every possibility, but, as Kay points out, this mindset makes all the difference. Read his full post at the link below.
Setting Your Money 'Normal' [Forbes]