8. Saving is a State of Mind
by jedda · 14 things on Twos
- "Learning to budget and save, to make wise financial decisions and to live within our means are critical and very necessary skills."
- "No other facet of our life is all-encompassing as money; it literally affects every single thing we do."
- Financial peace can be defined as "a state of mutual harmony with money; freedom from oppressive thoughts or emotions related to spending; harmony in personal relationships and freedom from strife or dissension regarding personal finances; contentment with what one has."
- "Financial peace is not a number on our bank statement or a perfectly balanced budget; it is instead a state of mind."
- Budgeting:
- Identify your income
- Determined fixed expenses: things that have to be paid each month, regardless of whether you want to or not. Add all this up and subtract from your income.
- Determine variable expenses and how much you can afford to spend on them. This includes everything else, from food and gas to entertainment, clothing, car and home repair.
- The most important thing to keep in mind when it comes to the money we spend is this: Everything is negotiable.
- "So much of our spending happens on autopilot that it is quite shocking to realize how many possibilities exist for cutting back, even on those things we need."
- "Telling your money where to go doesn't necessarily mean eliminating every nonessential purchase; it just means making a plan for those purchases that still allows you to meet all your other financial goals as well."
- Setting aside money for the future is not a luxury; it is a necessity.
- Fully funded emergency fund that can provide three to six months worth of income
- Making your money work FOR you instead of going against you is quite possibly the most empowering thing you will ever do.