“I cannot afford it” is a BS excuse.
Trigger alert: this post contains tough love.
If you say you “cannot afford it”, there is a deeper reason for why you are not doing something. You just have to be honest with yourself.
I remember a story from the late, great Mary Kay Ash: Even in the Great Depression, people always found money for three things: alcohol, tobacco, and make up. It was one reason why she decided to start a cosmetics line. People will find a way to afford what they value, even in the worst of times.
When you say you cannot afford something, it means it is not a priority for you. Let’s just call it what it is.
Not only does saying “it is not a priority” empower you, but it leaves little room for argument from anyone else.
When you say you cannot afford it, others will be more than happy to tell you all the ways in which you could potentially afford it: loan, credit card, using the money you were going to use for something else, etc.
When you say it is not a priority, others may try to talk you into making it a priority for you, but there really is not too much they can do to change your mind. It places you in a position of power and strength.
The same is true for your money. When your money has a definitive place to go, it is more difficult for you… or anyone else… to redirect it elsewhere. It is one of the primary reasons for using a percentage system for every penny that comes into your life. No money in the “play” account? Well, that fun thing will just have to wait until the account is replenished. You will not be robbing Future You (Invest) to accommodate Buy It Now You (Play).
For those of you not familiar with this system, you basically allocate your incoming money as follows:
10% Education
10% Future You (investing)
10% Savings
10% Play
5-10% Giving/Tithing (there is a range in case you give of your talents instead of talons)
50-55% Bills
Your student loan payments fall under “Education”, as well as courses, books, and anything else you use to better yourself.
Your retirement contributions fall under “Future You”. Use the rest to invest in stocks, bonds, annuities, crypto, real estate, or any other investment of your choice.
Your savings account can start off as an emergency account, but can max out at 1-2 years of expenses. After your savings reach this level, you can redirect these funds to the other accounts.
Your play money covers all those fun expenses- meals out, daily coffees, mani-pedis, massages, day trips, that cute dress you really do not need, and other splurges.
If you do not need 50% of your income to cover your bills, you can redirect the remainder to the other accounts. And, you can accounts like “wedding”, “new car”, “dream trip”, “house down payment”, or anything else you want to save for.
The important thing is to keep the percentages the same. Do not make the mistake of putting 10% in Play if you are only putting 1% in Future You.
Money Moms know the best way to create the future they want is to figure out what are the priorities and make it automatic. After all, no one has time to spend hours on their finances…
The Money Mom Academy is an 8 module program with weekly group zoom calls, bi-monthly 1:1 sessions, and no end date. You can learn what you want, when you want, and as much as you want about money, finances, investing, and money mindset. It is truly the fastest way to get you from where you are to where you want to be- making magical memories with your family! Email me to see if it is right for you.