My Money Philosophy

Philosophy-Reid-Highsmith

 

Pondering important thoughts

I live my life according to a very specific set of values and ethics. Combined together, you could call it a life philosophy. My intent is fairly simple: do whatever I’m doing well and follow what makes me happy. I believe in hard work, in fairness, in equality. I think if you err you should recognize it and right it. I like to simplify and enjoy things. I want to work hard, do good and live well.

I have similar feelings on money.

For me, money is a tool I need a good amount of to do the things I want in life. My money philosophy is basically this: money is a tool, use it wisely. For me, wisely means spending consciously, cutting out spending wherever possible, and relying on myself instead of paying someone else for things I need.

My big picture goal is to own my time. The more detailed view of that is I want financial independence that allows me freedom from a 9-5 job. I want to travel, write full time, own a home, garden, lounge….I want the freedom of choosing to spend my time however I want to. Financial independence is the only way to achieve that.

Money allows me to do those things. For all of my adult life though, having a money philosophy seemed unnecessary. After all, I wasn’t making much as a waitress and I always had my student loans hanging over my head. I made enough to pay my bills, buy a drink and that seemed like enough. Money wasn’t a tool so much as a constant worry.

Making the decision to become debt free changed my relationship with money. I started tracking and challenging all my spending. I started using the debt avalanche method for my payments. I asked for raises I deserved, so I could make more money and pay off my debt faster. Now I’m less than two weeks from being debt free and my relationship to money is going to change (just a little bit!) once again.

I’ve realized something: I am not a financial risk taker. I am way more comfortable saving than spending. Debt payoff is perfect for someone like me. I head out in the world, earn my money and watch it come in. I make one simple online transaction, money leaves my account and the debt balance drops. I don’t have to overthink anything, I don’t have to worry about market fluctuations. I can’t lose anything except my debt.

I like having access to my money and I always have (through checking and savings accounts.) All that’s about to change though. I have to start investing in the stock market and I have to be aggressive about it. Early retirement doesn’t come to the weak of heart!

Living so frugally these last eight months has really changed how I view money, spending and myself. I’ve gone from being someone who likes to save but who happily spends for pleasure and for ‘needs’ (like getting my oil changed), to someone who DIY’s whenever possible and who avoids spending. It has not, however, made me any bolder with my money. That’s a part of my mindset that needs some beefing up! I want to continue to spend and save wisely, but I need to invest smartly and consistently. That means getting over my fear of the stock market.

As soon as I am debt free I will have taken a huge first step towards financial independence: I will own my money. It might not be a lot of money, granted, but it starts being all mine. For the first time in my life, every dollar I earn will stay in my bank account. I’m really, really excited about that!

While to some people it will look like I have more to spend once I’m out of debt, the reality is I have more to save. I want to continue to think through all my decisions carefully before pulling out my hard earned cash. I like the changes I’ve made in my life: living better with less, being mindful of my time and needs, coming up with alternatives to spending. It honestly makes me happy and less stressed. I want my money philosophy to guide me now that I’m actually going to have some money.

Spending consciously and being as self-sufficient as possible are habits that are here to stay. I control my spending, not the other way around. As I begin to take the next steps in my financial journey, I’m excited about what lays ahead. I’m excited to grow in my relationship to money. I’m excited to reassert my money philosophy. I’m excited for my life!

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4 Replies to “My Money Philosophy”

  1. So great that you’re thinking about your money philosophy — most people don’t have one at all! As you’re thinking through how and where to invest, you might use this great resource from Vanguard: https://personal.vanguard.com/us/insights/saving-investing/model-portfolio-allocations. (It’s not selling their funds — just research on how to think about your allocations.) Take a look at the growth category at the bottom, which you’ll want — you actually don’t give up much in potential gains by including a healthy percentage of bonds in your portfolio, and that will help you feel like your money is less at risk — important for a (financially) conservative mindset!

    1. Wow, thanks for that link! I’m about to hit a serious investing research phase. I’m definitely going with Vanguard when I have enough to buy some funds. It’s silly that it’s so intimidating really, but I am a typical millennial. The recession really rocked my world! I know if I want to get to the level someone like you is on I have to learn as much as possible and then just take the plunge!

      1. Haha — investing isn’t just intimidating to millennials! 🙂 The good thing is, as long as you start saving and make sure you have your money somewhere it can grow (that is, not just a savings account), you can always move it later. So you don’t have to get it 100% right the first time. Having seen the last financial crisis up close, you’re definitely in a good position to make smarter decisions than older folks have made, like sticking with index funds and bond funds, and going with a low-cost investment company like Vanguard.

        1. Index funds seem to be the answer. I also keep telling myself that while I don’t WANT to work past 43, I COULD. While I wish I could have started investing at 20, 27 isn’t so bad either. =)

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