Last week I challenged you to think differently about your new year resolutions. I want to continue on that train of thought. Let’s say you buy a new phone. What do you immediately stop doing? You stop using the old one. You transfer all data to your new phone and the old one goes into a drawer or is sold off. When you want to add something new to your life, you have to be ready to release the old. Otherwise, you are simply piling up new things into your already busy lives and expecting the impossible. You need to follow this same principle with your time and money to be able to see a difference this coming year.
Let’s start with how you use your time. In our Centonomy classes, we do a session on the time value of money. In one of the exercises, we make people calculate how much time they spend on things like social media, TV, oversleeping, entertainment, traffic etc. These are the activities that are not related to work and spending quality time with people who are important to you. If you spend an average of four hours a day on these types of activities (you may do less during the week and more during the weekend), it adds up to two whole months per year. You can achieve a lot in that time or even just a portion of it.
In a New Year, many people want to make certain moves. Some may want to learn to run a business, work towards a promotion, save or invest more, be healthier, take a course or even build networks. This doesn’t happen if you don’t consciously decide to spend less time on certain things and more on others. Spend less time watching TV so that you can read and learn something. Re-arrange your life so that you do not have to be in the supermarket line with everybody else on Saturday morning. Take the morning to drive around and figure out what opportunities are there in real estate. When I started my business I consciously had to let go of social life on Friday because I worked on weekends. To achieve your objectives, you also have to place yourself in the environments that will encourage you to grow. You may have to stop taking part in certain conversations. This might mean letting go of certain relationships that are not working for you. Nobody created wealth by joining forces with victim minded people who want to blame everything and everyone else.
Almost everybody intends to save and invest more in a New Year. That’s noble but as we speak to people at this time of the year, many confess that they are not where they intended to be. This is related to our first point on ‘time’. We do not allocate time to learn or to pick up the phone and talk to an investment advisor. We usually don’t have a plan to earn more money. We don’t consciously dedicate time to doing the things at work or in our businesses to make more. It may mean longer hours or spending time more efficiently. Whichever way, we will need to let go of certain activities.
If you want to save or invest more within current resources, it means you must forego something. In essence, that’s what budgeting is. Planning what you will say yes to and what you will say no to. Where your money goes and doesn’t go. You cannot get out of debt if you are still living above your means. You have to stop spending on certain things. You can’t save more if you do not cut down on spending. With money, you also have to say no to certain mindsets. You cannot create wealth if you are caught up trying to impress other people. You have to control this constant need to acquire more stuff.
There will always be something better to buy. Many people struggle with impulse spending and then realize that they have tons of things they do not need. Have the same approach with your things like the phone example, especially if you know you already have enough. Buy if you are ready to let go of something. A new pair of shoes, a jacket, shirt, piece of furniture means you are willing to let go of something. This will help keep spending in check and ensure that when you buy stuff it is really important to you. If you clear out your house or wardrobe you may even find you have heaps of stuff that you can sell.
It’s all about the decision on what you will say yes and No to. Everything you want to do has a price. It requires you to intentionally choose what you will not do.
Waceke runs programs on Entrepreneurship and Personal Finance Management. Registration is currently open and ongoing through our website centonomy.com For more information get in touch with her through waceken@centonomy.com /Facebook-Waceke Nduati /Tweet @cekenduati