New Financial Plan

If you want to be rich you have to save money.  It doesn’t matter how you get the money coming in, what matters is how you save and invest it.  You can earn money, make money on investments, generate passive income, inherit it, win it, find it, or anything else.  If you get enough you can consider yourself rich.  If you plan and use the money wisely you can actually become and stay rich.

While we don’t have enough money coming in to be considered rich, we have a plan, a savings and investing habit, and a good enough start that we anticipate growing our assets to allow us to be rich in the future.  We simply save money when we can, invest it according to our situation, and patiently watch it grow.  We don’t use many gimmicks or tricks in our savings.  We have made it a way of living, not anything special or hard, and that makes us more confident in our goals.

This article talks about “money-saving games” you can use to “trick” yourself into saving money.  The exercises are a coin jar, pay yourself first, lower your recurring bills, live a raise behind, continue payments after payoff, and pay to use.

Here is my quick take on each of these.  We have a coin jar, and coin collections in each car, just because we don’t carry change around.  I guess we pay ourselves first, even though we don’t think of it like that.  All money coming in goes into the bank first so it earns interest and can be tracked.  We don’t try to lower bills as some sort of contest or competition, but weigh spending options on all bills up front.  I measure patterns and changes to understand them, and make changes if necessary, but never blindly force savings just to beat my past performance.  We don’t live a raise behind, but always live on less than we earn.  I plan enough to know when payments will start, end, or change.  I weigh my options to consider refinancing or paying loans down early.  I haven’t had reason to “trick” myself into saving payments after payments ended, mostly because our situation always changes and I update our plan often enough that there is no reason to “trick” myself into anything.  I always consider the cost of using things and replacing them, but never pay myself to use our own things.

My plan seems to be more basic than those tips.  Maybe there is something there that would help us.  I don’t use separate accounts or strict budgets.  My “budget” tracking is mostly backwards looking.  We track our goals, plans, and spending at least monthly.  We have less accounts to track, a higher balance to earn tiered interest, and still do well saving.  We know how well we are saving each month and make decisions as they come up.  So far we have maxed out IRAs for several years, paid down loans, and steadily increased our net worth.  All of this we did consciously.  Maybe I’ll find a reason to trick myself into doing things differently.  For now I believe that I have a good enough handle on things to manage my money without screwing things up.