Lately, I’ve been thinking about how incredible a simple shift in our family’s mindset on spending (and saving) created such a big change in our financial trajectory.
Sure, our path toward getting out of debt and planning for financial independence has been a process with very intentional actions, but first we had to change our family’s mindset on spending and saving.
We are now thinking about money in a new way – not as a tool to “buy, buy, buy” but as a tool to secure freedom and independence (while also living a bad ass life).
As Gru from Despicable Me loves to say… “Light. Bulb.”
Our Old vs. New Mindset on Spending and Saving
Am I too up in the clouds right now? Let’s bring it down to earth. Here are a few examples of how our mindset on spending and saving has changed.
“Mom, can I PLEASE get this Rescue Bot toy at the store today?”
- Old me: Sure – we can afford it.
- New me: Sure, if you would like to spend your own allowance on it (or earn your own money to buy it).
“My husband just got a large end-of-the-year bonus!”
- Old me: Oooh, what should we spend it on? A trip? Maybe that new living room furniture?
- New me: Sweet! Let’s put all of the bonus into savings, diverting as much of it pre-tax as possible.
“Our car lease is up. What should we buy next?”
- Old me: The newest model with all the bells and whistles.
- New me: Nothing, let’s just give it back! (Or, if we did really need two cars, a reliable used car we could pay in cash.)
“Our house is feeling small and we want to be closer to work, let’s move.”
- Old me: How much are we approved for? How much house can we get?
- New me: What is the least expensive house we can find that will fit our family’s needs? For example, close to work and shopping so we can primarily walk or bike, low maintenance, close to family/friends, etc.
“I am thinking of going back to work full-time. This will nearly double our income.”
- Old me: Awesome! Think of all the extra spending money we will have for more dinners out, vacations, clothes, and activities. We won’t even need to budget that much (freedom!).
- New me: We can put a majority of the income into savings and this will shorten our retirement date from about 8 years away (2025) to about 5 years away (2022). True freedom!
“We need new [clothes, school supplies, shoes, appliances]”
- Old me: Let’s go shopping!
- New me: Do we really need it? If so, how can we make it, get it for free, or find it at a discounted price? If we have to pay full price, do we really need it now? Is it worth delaying our retirement for?
These are just a few examples, but you get the idea… We’re breaking the cycle of consumerism.
Our focus now is on reducing our fixed expenses, minimizing toys and stuff, and spending money on what really makes us happy – like experiences, time together, learning and growing, and exploring the outdoors.
Getting the Family On Board
At times this has been very easy – our new mindset on spending and saving is becoming second nature.
At other times, it is hard – especially breaking spending habits with our older son who has been more accustom to our old (slightly frivolous) spending habits.
After all, money is so intertwined with emotions, peer pressure, and social status.
We’re still on this journey, but here are some tips I’ve learned along the way:
- Focus on the positive
- Stay consistent (and stay firm with decisions)
- Allow older kids to earn money and decide how they spend/save/invest/give
- Use every day experiences to teach kids about spending and saving
- Talk about future goals with the family (as age appropriate)
- Emphasize doing stuff vs. buying stuff (ex: go do stuff together!)