Budget for a Journey, Not a Sprint

Budget for a Journey, Not a Sprint

If you’ve had a chance to listen to mainstream gurus such as Dave Ramsey, best-known for his book The Total Money Makeover, or David Bach, best-known for his book The Automatic Millionaire, then you are familiar with the mantra “Save now and invest for retirement.” In my experience, this is great in theory but much harder to put into practice.

It takes a highly disciplined individual to save money consistently and sacrifice current luxuries in order to have a significant payoff decades from now. Science and numerous studies have proven how beneficial delayed gratification can be in relation to our amount of success in life, but it is a very hard skill to develop.
I personally believe that with any long journey, you need to be comfortable, cognizant of your current location, and reminded of your final destination. Ensuring these three things gives you a far better chance of success during your financial journey.


photo credit: 401(K) 2013 via photopin cc

Make Honest Compromises within Your Budget

Before my wife and I had children, we used to go out with friends every weekend. We would have dinner, drinks, and sometimes attend some sort of event. We didn’t realize how much money we were spending until we used Mint.com and saw our categorized charges. It totaled well over $100 a weekend. Most financial gurus recommend going cold turkey and eliminating all unnecessary spending, but we don’t subscribe to that mantra. We knew we needed to cut back, so we had some decisions to make.

My wife and I are complete movie and TV show buffs, so we decided to get Netflix, Hulu, and an external hard drive to maximize the space of our DVR. Minus the initial cost of the external hard drive, this cost us $25/month. We decided to only go out with friends once a month for a big hoorah. This decision ended up saving us over $300/month, while we were still able to engage in something we both enjoyed.

Set Milestones Then Reward Yourself

Some may have heard of the “Latte Factor.” If you haven’t, the basic premise is that you forego your favorite latte on a daily basis and invest that money towards your retirement. That sounds great in theory, but I wonder if David Bach has ever tasted a Vanilla Latte from Starbucks?! They’re practically undeniable! So instead of torturing ourselves until retirement, we get a latte every Friday if we have stayed within our budget for the week. You’ll be amazed how a simple reward can keep you on track.

photo credit: 401(K) 2013 via photopin cc

Keep Your Eye on the Prize

With anything in life, if you don’t have a strong enough reason to do something, you will give up 100% of the time. When the road gets rough and times get hard, you will undoubtedly fold under pressure if you don’t have a clear understanding of what you intend to accomplish. I recommend taking a picture of something or someone who means a lot to you or jotting down the end goals you have. Then keep those things with you at all times—yes, I mean all times. You never know when temptation is going to rear its ugly head. You may have a good salesperson in front of you making complete sense on why you should purchase XYZ product. This is when you pull out that little reminder to keep you on track. I know it sounds silly, even a little cheesy, but I cannot tell you the number of times pulling a picture out of my wallet has gotten me out of potential purchases or discouraging days.

Life is a long journey, and while some experts make a great case for living with the bare necessities until retirement, I believe you shouldn’t lose focus. You only have one life to live, and while I do not advocate wallowing in debt forever, I believe you should enjoy your life while making moderate decisions within your budget.
This post is written by Marvin Simms from Brick By Brick Investing, where you will find regular posts regarding basic investment principles, saving money, and personal finance. His aim is to help you increase your financial IQ and wealth in the long term.

This post is written by Marvin Simms from Brick By Brick Investing, where you will find regular posts regarding basic investment principles, saving money, and personal finance. His aim is to help you increase your financial IQ and wealth in the long term.