New Year, New Behavior
Happy New Year! Praying that your New Year is a great start to a New Beginning and that you’re taking advantage of all the behaviour modification you can when it comes to The Audit you are working on from our last article.
We completed the article with a high level process to determine how your investment dollars are lining up with what is important to you. We asked the hard questions, we are honest about the answers and we are stronger and more equipped to make this year an even better one, financially.
As part of getting ripped, let’s continue in the process of The Audit. I promised a few examples of how to put The Audit notes and findings into real life and here are three that I love sharing. As a disclaimer, the examples I am going to use here are real examples from my life and my finances. My finances probably look different than yours and that is no reason to believe this process will not or cannot work for it. Some of the numbers may be scary, some of my choices you may not agree with. And that’s ok. I’m not asking you to agree - I am giving you real life examples from The Audit to show you how I use them. You can judge all you want on how much money I invest in these areas and only God, my accountant and myself know the details.
One year, I had a higher investment into beauty. I had hair extensions which cost $1,000 just for the hair and the maintenance is more than average natural hair would be. Hair extensions require pull up appointments where your extensions are realigned with your scalp often, on top of regular maintenance of colour and trims for my natural and recurring hair investment. After a few years of having extensions, as much as I loved them, I went through the audit, asked the questions and felt it was time to take a break. Practically speaking, the extensions became more of a challenge on a day-to-day basis than a benefit which I mulled over long and hard before finally deciding was the time to let them go. Removing them, and since I had been engaging in more blow out appointments to manage the extensions which I no longer needed, made my investment in this area drop significantly.
While evaluating another part of the beauty category of my investment plan, and asking the questions, I came to the awareness that I don’t like any part of the process around shellac manicures. I find it annoying to need to make an appointment, it takes forever to complete and I can’t multitask while in the service. Even worse, the shellac made my nails an absolute wreck from the grinding and filing and I couldn’t complete regular physical activities anymore because my nails kept peeling back or ripping off. After noticing that I was investing in something I didn’t enjoy, I decided to focus on my nail health and invest more time and less money to do my weekly polish changes myself. I won’t be investing in any manicures (maybe the odd pedicure in the summer) or in any extension related hair care, bringing my overall investment in this area down by 50% or cut in half. For my notes, this looks like: no shellac, nails at home. Reduce investment in beauty by $3,500.
One year, I purchased an agricultural property about an hour west of the GTA. When I purchased it, I needed to have insurance in place right away for closing on the financing. At the time, and in a hurry with a very short closing and a million details to take care of, I went with the first option for insurance that was a significant monthly investment. It was what I felt I had to do at the time given the circumstances because it was going to work for the purpose of what I needed it to by the time I needed it done. The next year when I did my audit, I put insurance at high priority for a change and had the time to go out to other insurers and ask for competitive quotes and found one at a fraction of the cost. I ended up having all of my insurance restructured at the same time, a full overhaul, because I knew I didn’t need to invest that much on insurance. I reduced my investment in insurance about $7,000 the next year from this exercise.
One year, I invested more in clothing than I felt necessary. Mainly, after looking through the transactions I found in my audit, there were a few big ticket items that I had a bit of buyers remorse from – I didn’t feel they were worth the investment after the fact. When I was going through the audit line by line, one of the transactions stuck out that was a Prada winter coat which wasn’t as functional as I needed and honestly didn’t look THAT great on me. Thinking back to when I purchased it, I remember being at Holt Renfrew with my mom and having the discussion that she really liked it, I liked it, I needed a coat, it fit, she thought I should buy it and I bought it. I think she liked it more than I did. What I value about clothing is first the way it fits my body shape, the way it feels to wear, the utility of the item and lastly the designer is less important to me for clothing (not the case with shoes and accessories but clothing, this is it). Knowing this, I have the information in hand to be able to make a better decision next time. I also know that in the same circumstance, I am responsible for changing the outcome and my mom isn’t to blame just because she liked the coat more than I did or because she encouraged me to buy it. The one swiping the card and signing the cheque is the only one to blame for investments. From then on, I stayed away from buying any clothing from Holts as long as I’m paying the bill. This is an example of a behavior modification decision which is smart to record. In my notes, this looks like: Stay out of Holts for clothes, avoid impulse purchase of big ticket items, the way something looks on you is more important than the way it looks to you. Reduce investment by $3,000 in clothes.
Now, it’s your turn.
Do The Audit, ask the questions, and make the notes. Then decide on how you are going to make this year better than last! Let’s talk more behavior modification in the next article.
