I thought we’d turn budgeting on its head this month and, instead of fitting our spending into our income, what if we added up what we need to live on and then determine how much more money we need to bring in (through more business, a part-time job, a raise, selling items on eBay and such). This bottom-up approach left a few attendees wondering how they would attract more money into their lives.
The topic of selling items on eBay, Craiglist and the like prompted a discussion about hiring professional organizers. It turns out most of us (including I) had hired a professional organizer with wonderful results. I cannot believe the difference in our basement. I will not share any “before” photos because I am far too vain but let me tell you, it was not pretty…and now it is! Plus we sold all kinds of stuff and used the money for other things. The benefits of hiring an organizing pro include:
– the ability and opportunity to change your thinking (this is by far the biggest benefit)
– clear out and clean up (= healthier enviroment)
– money from items sold
– items donated to charity (=possible charitable deduction on your taxes)
– paperwork that is no longer needed gets shredded to protect your identity
– permission to get rid of stuff (permission is a big thing for many of us)
– no judgment
Back to budgeting…once you go through a room you quickly realize that you’ve bought things that you haven’t actually used, haven’t used in a long, long time, haven’t given to the person you bought them for etc. All of this stuff represents purchasing decisions that didn’t work out and can help us do better in the future.
Priorities are at the heart of good financial management. When you are clear on your priorities, you can accept the inevitable trade-offs that come with making good, balanced financial decisions. Instead of saying, “I can’t get this because I can’t afford it,” try reframing it by saying, “I am not going to purchase x so that I can have y.”
But what about increasing income? I came across this great article in the June 2012 issue of the Journal of Financial Planning titled Financial Planning: A Look From The Outside In. The author, Paula H. Hogan, CFP® wrote this about human capital, “…the present value of lifetime earned income…what you do in the world with your skills and talents and how society chooses to pay you for those endeavors.” The thing that caught my attention was the “how society chooses to pay you” because as much as we try not to confuse self worth with net worth, at the end of the day, we are people living among other people and sometimes rely on what we’re paid by other people to judge what we’re worth. Oh boy! How about this: Instead of relying on others to tell you what you’re worth, you tell people what you’re worth (and don’t put yourself on the sale rack). The key to this, of course, is knowing your unique skills and talents and then confidently communicating them.
Get to work!
Photo courtesy of ClipArt