Money Monday: Changing Your Perspective


So, yes, it's Monday once again (funny how they keep coming around every seven days) and I have another opportunity to share what's been happening on the financial front.

As per usual, we are daily living in a state of grace and dependence upon God to meet our needs and help us deal with not getting some of the "wants."

Last week, I mentioned about how tough it was for me to buy that $29.99 Target sweater/shrug -- even with a coupon. However, this last week when I wore it to our weekly morning Bible study, I got a ton of compliments and someone brought up how I had blogged about it and so I shared the story.

Later on in in the morning, one of the ladies there gave me a $10 off Kohl's card to use towards the purchase of $10 or more. She said she wanted me to use it to buy something I needed. I was so touched by her gift because really, it was like handing me $10! I put it on the table next to my stuff and didn't think about it until after the lesson was over I went to pick it up and I found $20 stuck to the bottom that another lady sitting next to me had put there. She smiled and told me that she wanted me to use it in conjunction with the $10 off card to buy myself another sweater.

Can you believe that?

I walk into Bible study with my new sweater and walk at with $30 for another one! How's that for miraculous?

Add in an unexpected free drink card at Starbucks as well as a $5 gift card I found literally the day after I realized that we really didn't have the usual $15 to fund my registered Starbucks card for the month (and once it's gone, it's gone)...and that's a pretty awesome week!

I couldn't even make this stuff up!

(Sidenote: My husband and I are officially leading a FPU class at our church starting in January. To sign up, or sign up for a class in your area, check out the list of classes offered here. (Remember...you can sit in on any class for free.)

So for me, this week has been about letting God provide...and also about changing the way I see my perceived lack.

On a Facebook group in which I belong, the discussion came up about the monthly grocery budget and how much the "average" person spends on food items (not toilet paper, etc.) per month per person. We all want to to do the best we can with the money we have, but so many of us feel like we fall short. One of my friends who is a part of the group expressed a weariness for being so tight with the budget for so long and not having any extra for...well, extras. She also said that her husband has expressed feeling like he is not being a "good provider" because they have to do without in many ways.

As we discussed that (and it's definitely a very real feeling and I think very prevalant nowadays), I started to realize how much this "lack" is perception based. When we look at other friends and peers and see them with all their children in multiple sports, taking Disneyland vacations and renting RVs for road trips, we can start to look at our own lives and financial picture and start to feel "less than."

After awhile, we can start to feel a bit sorry for ourselves that we have to shop at Walmart, or Goodwill or maybe not even shop at all. Maybe Freecycle is your best source of clothing for your children (btw, I think that's awesome!).

I've totally been here (and I think I'd say we are very much "there" right now) and I get what that feels like. However, not only do we not know how those "other people" are paying for their vacations and extracurricular activies (who knows...they could be racking up debt to keep up with their "others!"), we often don't know just how good we have it in America.

I get it...I do. I know that it feels bad not to be able to give your children "the world," or even some little things that we feel like they should be able to enjoy. But, I have seen poverty so fierce that it made me weep to even witness it, let alone have to compare it with my life and what all of a sudden seems like untold riches.

It's all about perspective.

Perspective is defined as...
  1. a way of regarding situations, facts, etc. and judging their relative importance.
  2. the proper or accurate point of view or the ability to see it; objectivity
For example, when you look at the piggy bank in the water on the photo above, do you see a piggy bank drowning or a piggy bank going for a swim?

It's all about....perspective.

We learned about this last night in our week 8 lesson, Of Mice and Mutual Funds: Understanding Investments.

When you realize that yes, hunkering down and dumping debt can be difficult to do when there is so much out there you would like to buy or participate in, BUT, having a debt-free household brings its own (and even greater) rewards, it can make the short-term sacrifice worth it.

Take a look at this chart I uploaded from my FPU workbook.


This totally rocked my world last night. As I've mentioned in previous posts, by temporarily stopping our investments, pulling our son out of preschool, etc, we have been able to free up about $500 per month to help pay down our debt rapidly and then use that extra money to once again invest and save...and live.

If you look at the chart, that $500 that will be tied up over the next two or so years (hopefully less, by the grace of God), you can see that if we didn't have the debt and invested it in a mutual fund that pays 12% annually, we could potentially make $49.835 in five years, $249,790 in 15 years and $939,423 in 25 years (almost a million dollars!!)

While that's a bit of a bummer to realize now (when we don't have it to invest), it's a great incentive to get things paid off and put that money to work for us. When I look at this chart, all the "I wants" seem to fade when I see the reality of how our future can look.

Am I saying that we'll never make it back to Disneyland?

No...but what I'm saying is that having a different perspective changes the way I think about spending our money. I definitely want to take our family to Disneyland. But we'll do it when we're debt-free and can pay for the trip in cash. And we'll do it while we're investing at the same time.

Win-win-win.

A couple of other things we learned last night:

  1. The KISS rule - Keep It Simple Stupid - never invest in something you don't understand
  2. Diversification - never put all your investment eggs in one basket; this lowers risk
  3. Mutual Funds are great long-term investments and give the best rate of return for most investors (how you invest in the funds (aggressive or growth funds) depends on your goals and age.
  4. Rental real estate is the least liquid investment; have a lot of cash before using this as an investment.
  5. Savings is for 5 years or less; Investing is for more than 5 years.
And lastly, build wealth slowly; be the tortoise and not the hare -- because the tortoise always wins the race! However, this does not mean you have to be ultra-conservative. With all investments, as the risk goes up, so does the potential return. As a quote in our book says,

"Behold the turtle only makes progress when he sticks his neck out." -- Anonymous

The bottom line is to be in investing for the long haul and make sure you also know what you are investing in and how much return you are getting. If you don't know, find out. If you don't understand, ask. If you feel dumb asking your investment manager, find a new one.

After all, this is your money, invest it wisely.

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To read more about our journey to financial peace, read related posts here:
http://www.mosaicmomma.net/p/finding-financial-peace.html

For more info on Financial Peace, visit:
http://www.daveramsey.com/fpu/preview/


For info on Inzolo -- an online and mobile "envelope system," tool, visit:
www.inzolo.com

For more info on The Blessed Life, visit:
http://theblessedlife.com/

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