Why do we fall?

It's been a particularly challenging week. Last minute travel for work coupled with a slew of birthday and graduation parties has taken it's toll, leaving little time for simple pleasures like curling up with a book, cooking or writing.

I thought I'd share a little progress on my commitment to write an hour a day: I traveled for work this week and did not once even attempt to write Monday through Thursday. My trip was particularly stressful and my writing at those times is often convoluted or clouded with negativity, so I opted to avoid writing all together. If I ever hope to be a serious writer, I'm going to have to overcome the challenge to write during stress. After all, to say my "normal" life is absent of stress is far from the truth. But I'm not giving up just because I wasn't able to meet my commitment this week. In fact, now I'm even more resolved to stick with my writing. If only I had someone to help with all my other commitments….

Making any significant change successfully has a lot to do with self reflection. You will fail - likely more than once - more likely much more than once. The list of people who have achieved something significant on the first try is very short - if it even exists (believe me, I looked). This is true for a multitude of creation, from developing the light bulb (thanks Thomas Edison) to developing a working budget. So, since this is a blog about money, let's bring it back to something relevant to personal finance...

Mr. Common Cents and I analyze our budget every month. It's not that we continuously go over budget, (after all, we have been analyzing our spending for the past year). The reason we look month after month at categories like groceries, gas and gifts is because life isn't always constant. Sometimes, life gets in the way of our budget. It's during those times that we look at our spending and find ways to work our goals into our lives. We ask ourselves serious questions for the things we spent money on:

Did this category meet our expectations?
If it did, what can we learn? If it didn't, what happened and what can we do differently next time? (This month, we will end up over budget on gifts because of the aforementioned celebrations, as well as an upcoming wedding. Although it's more than we generally spend, we will likely still end up meeting our annual budget goals.)
Do our expenses reflect our values?
At the risk of sounding cliché, you really can tell what your priorities are from your calendar and your wallet. (Showing appreciation to loved ones is important to us. Over the last 4 years, we've learned to find other creative ways to show our love, but with a large family we still have a minimum amount of gifts we are willing to commit to.)
What can we do to prepare for next month?
This question is a culmination of the answers from the previous 2. (With the gift budget, we can continue to find creative ways to show our loved ones how much they mean to us. Sometimes this means spending a lot more time making a personalized card than picking it up at Hallmark. Sometimes, this means shopping on Amazon for something we know they will love.)

Life happens no matter how many contingency plans we've made to prepare for the unexpected. Sometimes, we have to learn to roll with the punches. It's at those times that we realize why we failed in the first place… but I'll let someone else say it better:

I'm learning to pick myself up again. Life is so much more fulfilling when our mistakes have a purpose - to teach us what we're really here for.

Habits

Great news for Our Common Cents! I've recently joined the Money Hacker Network, and that involves a certain level of commitment from me - that I will post new blog entries, at minimum, three times a week.

The good news - Writing allows me to express myself in a creative way, I'm enjoying the process and have plenty of ideas to share.

The not so good news - No more excuses when I lack the time to write due to hectic work schedules, business travel, personal time, or any number of excuses I've used this year.

To be honest, I'm a little nervous about making an official commitment. Through various report cards, progress reports, and performance reviews, I know my strengths - I am wonderful at generating ideas, gaining passion and starting a project with enthusiasm. Following through, on the other hand, not so much. If only there were a way to trick myself into changing that habit….

Thinking about change takes me back to my academic roots in psychology. Not the psychoanalytic variety (personally, I'm not too fond of psychos or analysis). No, my passion was motivation - motivation for change, driven by the belief that all people are capable of significant, lasting change in behavior. I still feel that way and have learned to approach myself with the same sense of optimism. From a scientific perspective, what prompts successful change in people? The jury is divided, but there are some common themes that can apply to just about everything, from starting a diet to following a budget to making time to write a blog:

1. Commit to your vision. Don't kid yourself that you want to do something if you really don't. Early in my career I worked at a weight loss chain and often asked people where their motivation for losing weight was coming from. The dieters motivated by a timeline or external focus, whether it was their high school reunion or their own wedding, didn't keep the weight off for the long term and rarely made it to their target weight. The only people who were successful were committed to changing and were internally driven.
   
   
2. Make it public. Don't ever underestimate the power of humiliation on accomplishing a task.
   
3. Find support. Yet another reason
   why Weight Watchers meetings are so successful. Perhaps you can accomplish 2 and 3 in one fell swoop if you find the right support group.
   
4. Be consistent. Studies have shown it takes approximately 21 days to form a habit. The science behind this is complicated - in a nutshell, that's about how long it takes to create neural patterns in the areas of the brain associated with habits, addiction, and procedural learning. Make it 30 days and the inertia you've created will be much easier to sustain than to revert back to your old ways.
   
5. Monitor progress. Self reflection is key in all areas of life. Winston Churchill said "People occasionally stumble over the truth, but most pick themselves up and hurry off as if nothing ever happened." Don't make a mistake just to give up. Make your
   mistakes useful and success will be even sweeter because you will not only have learned the path to your goal, but also the path that leads somewhere else.
   

   
   

   I'm making it a goal to write every day this month for at least an hour. I'll follow up (public commitment!) at the end of the month.
   

   
   

Going Against The Grain

I have never been much for going along with the crowd just for the sake of getting along with the crowd. I'm just too much of an individual. Even in my influential youth I had trouble fitting in because I often marched to the beat of my own drum and (with few exceptions) did whatever I wanted. Mr. Cents also follows a similar mantra. My mother-in-law tells me that Mr. Cents was practically born a non-conformist. His first sentence at the wise age of two was "me do it."

The trouble with blazing your own trail is that sometimes you alienate people. It's especially challenging living a lifestyle different from your peer group. With few exceptions, people tend to associate with those that are like them and veer away from those who aren't. It makes sense, then, why there's such enormous pressure to "keep up with the Jones' " and why the phrase "you've changed" is often stated with such distain. Peer pressure is a powerful motivator, and although the face changes the message is the same: Just do it - be like us so you can fit in.

Right now you're thinking "Nonsense, I'm not a kid anymore. I make my own decisions. No one tells me what to do. I'm not a victim of peer pressure." That's because peer pressure often has a friendly face: your shopping buddy who tells you about the great deal she just got in your favorite shoe store. The friendly host who encourages you to forgo your diet for just one more night. The spouse who lures you with watching a movie instead of getting on the treadmill. The message is "Live for today! You can always put off your changes until tomorrow. For now, just get comfortable and do what you've always done."

Considering spending, there is another powerful motivator - to have the best things, to be admired by your friends and associates.

Those shoes are sooo cute - I can just hear the compliments I will receive when I wear them to work.

Everyone will want to come to our house to watch the big game on a giant flat screen TV. We're going to have the best Super Bowl party ever.

Our peer group isn't the evil, materialistic consumers we have made them out to be. Instead, they have a friendly face - they are our friends, our family, our co-workers. Not everyone has an intrinsic desire to follow their own desires enough to forgo relationships with other people. Leaving our relationships in tact nearly always trumps meaningful change.

Are we destined to either maintain the status quo or live a life estranged from the people who matter to us? Absolutely not. Although radical change can sometimes intimidate us, gradual changes over time can ease us into the life we want to live while maintaining relationships. Over time your changes can even have a positive influence to those around you. There are several things you can do to ease into a frugal lifestyle. Here are 6 easy tips to get you started:

Good news - saving money is in!

Whoever thought being frugal would be trendy? Sustainable living is gaining increasing popularity. You can easily recognize the trend when even celebrities buy electric cars, carry reusable shopping bags and make sure their residence is "green". So now, you're not cheap by meal planning so you don't waste food or combining all your errands into one trip - you're saving the environment!

Surround yourself with a new reference group.

Not motivated by your current peer group? Join a new one. When you are trying on a new lifestyle, it helps to surround yourself with others who are also living that lifestyle.

The Weight Watchers mantra "People who attend meetings lose three times more weight than dieting alone" capitalizes on the phenomenon that you need a support group to help with change. The psychology behind support groups is successful because it helps promote activity when you identify with a reference group. By changing your reference group, you can help influence your behavior.

Subscribe to financial blogs, join a financial investment group or start writing on a message board. There are plenty of avenues for creating a frugal peer group without abandoning your current social circle.

Recognize and remove some of the unconscious influence around you.

Stop window shopping as a hobby. Even if you manage to resist temptation, you will eventually feel a sense of deprivation if you spend every lunch hour at the mall or pouring over the latest Pottery Barn catalog. Stop unsolicited advertizing by putting yourself on a do not mail list. Cancel magazine and catalog subscriptions that immediately cause you to spend thousands of dollars in your mind.

Study a little bit of consumer marketing and you'll understand why the most popular items are at eye level - so that people can see them and therefore, buy them. Supermarket aisle end caps and checkout shelves are prime marketing real-estate - products placed in these areas are specifically marketed as impulse purchases. Have you ever gone to a store and said, "I need to buy a pack of gum and a Snicker's bar"? Of course not. Skip the end caps and arm yourself with the knowledge that the checkout shelves are aimed at last minute purchases.

Do you shop at Super Target for groceries and find yourself inexplicably drawn to buy things that aren't groceries? Try sticking to a grocery list and if that doesn't work, start shopping at a store that only sells groceries.

Try on a new free hobby

Despise climbing the stairs to nowhere at the gym? Join a running club and be instantly entertained. Consider your passion and find others who share it. Mr. Cents and I both love reading and politics. A library card and serving on community boards are free and fulfilling entertainment. Did I mention that you can rent movies and CDs at the library for free as well?

Be committed.

People tend to follow those with passion and conviction. If you believe in a cause, you can inspire and motivate those around you. Consider the end game and share it. People lack mentors. Be committed and you are instantly more attractive and inspirational. The trick here is to commit to goal that are meaningful - you have to believe in them too.

In every group, there are leaders and followers. In your own group, you can either break off from your group or lead the group in a different direction. As you change, the people around you will either change or leave your life, going in their own direction. You may be surprised at the impact you have, not only on your own life, but the lives of those around you.

Do not follow where the path may lead. Go instead where there is no path and leave a trail.

~Ralph Waldo Emerson

Courage to Change

People are talking a lot about the current state of the economy. Blame has many different faces: hyper inflation of food prices, oil costs reaching astronomical proportions, challenges in the mortgage industry, soft sales causing companies to downsize, and any one of a whole host of enemies.

There is one place that hasn’t seen much blame: within ourselves.

Throughout our lives, adversity happens. Our lives are nothing if not filled with change. For some, change is harder than others, especially when it comes to our financial lives. Yet change still wanders into our lives, sneaks into the crevices of good intentions and solid plans. So what can you do?

If life hands you lemons, make lemonade
Starbucks and cable are not life necessities. Most of us know this intuitively. In October, Oprah aired “The mom who shopped her family broke”. I watched in horror as a California mother of 6 spent $400 a month at Starbucks, paid for 3 cars, 2 homes and yet had no health insurance for her children. The level of financial catastrophe was extreme – and they needed to take extreme measures to fix it.

The necessary change they needed to propel themselves out of over six figures of consumer debt was drastic. They needed to move, spend less, get a second job and sell many of their possessions. The solutions were relatively simple but the family never considered them, because they were so far outside their normal routine. It’s easy to accumulate things we don’t need and grow new habits when we just don’t pay attention to it. We cast the blame on the irresponsible, yet how many of us have lived carelessly beyond our financial means?

Yes, you can.
We can learn quite a bit about ourselves from this family. You may not be avoiding health insurance for your family, but perhaps you’re putting off getting life insurance, investing in your 401k, or living a little outside of your current income, hoping that it will eventually catch up. We can look at our current spending and say “what would I have to do to eliminate or reduce this expense”, even with expenses we consider immobile or necessary. Think your utility bills are fixed costs? Try some tricks to lower electricity expenses. The high cost of fuel eating into your budget? Consider spending some time routing your errands together so you make less trips, contact someone to start a travel pool, look into public transportation, or even (gasp) moving closer to your work. The next time you hear yourself saying “I need ____” or “I have to buy ____”, really think about that statement. What would it take to eliminate that cost? Is it alternative worth it to you?

Saving money by realizing our choices can be incredibly empowering, even when it doesn’t result in finding extra money. Only you have the ability to see what you can truly change.

It is not the strongest of the species that survives, nor the most
intelligent, but the one most responsive to change.

-Charles Darwin