Habits are Key to Managing Money

I don’t consider myself a math whiz. After all, I’ve been known to look up the rules for adding and subtracting fractions, and I still get weak in the knees when I have to do ”public math.” I suppose you could find this a little ironic, considering I write about personal finances for a living.

I contend, though, that managing your money well has more to do with controlling your habits and emotions than it does with crunching numbers. After you understand general computation, the math of financial success is simple: Spend less than you earn. What isn’t so simple is living with a perspective that can help you do this.

Money perspectives are often so subtly-woven into your life that it can be difficult to recognize them. It’s like the old adage: The thing a fish is least likely to notice is the water in which it swims. To begin understanding your perspectives, you have to look closely.

You can do this by examining how you spend your money right now. Start by making two columns on a piece of paper. In the first column, list things you would really like to spend your money on. This might include a vacation, a college fund, charitable cause, new television, pair of water skis or garden fence, for example. Don’t count anything as too grand or insignificant.

After you’re satisfied with your list, get out your checkbook register or go to your online banking site and make a list in the other column that includes every place you spent money last month. If necessary, get out your credit card statements, too, so you can include individual purchases or expenses on your list. When you’re finished with both lists, compare them.

Are you spending in a way that is helping you get things you want? If there’s a disparity between your lists, ask yourself why. It may be owing to habits that go unchecked, such as eating out. But you may need to challenge what you would consider the most basic expenses – housing, food and transportation. It’s possible that your habits and perspectives have more influence than you realize.

Not long ago, my husband believed it was natural to have a car payment. His parents always had a car payment when he was growing up, so why wouldn’t he? It never occurred to him there was another option. It’s not wrong to have a car payment, of course, but you should consider why you have one in the first place. You may find that it goes deeper than your need for transportation.

What and where you eat says something about your perspectives, too. I once had a friend announce that she didn’t eat “cheap food.” I think she was referring to packaged foods, such as instant noodles and macaroni and cheese, but her statement seemed to apply more to her ideas about the meaning of food than to issues of nutrition.

You have to eat, but you have a significant amount of control over how much you spend on food. You need shelter, but you don’t have to own a home or live in a certain neighborhood. If living with a roommate or selling your house would improve the quality of your life, why not consider it?

Realize you shouldn’t allow a limited perspective to keep you from getting what you most desire.

CCCS/ACCE –American Center for Credit Education
Carey Denman

Buy What You Need, Not to Impress

My first car was a baby blue 1980 Chevette. Starting the car involved using a manual choke and feathering the gas pedal. It was prone to stalling out at stoplights and couldn’t climb hills when the air conditioning was on. A blanket covered the rotted back seat that flopped forward with sudden stops. That car was the antithesis of cool.

Having to feather the gas pedal in the school parking lot is never hip. But my fourteen-year-old mind reasoned that having a car phone might be. That’s probably why I used the points I earned selling products for the Spanish Club to buy what looked like an authentic car phone. I don’t know what I expected, but I was disappointed when the phone arrived and looked like a child’s toy.

It’s laughably incongruent, and a little embarrassing, that I imagined a fake car phone was my ticket to coolness. Nevertheless, reflecting on this story makes me think about the problem of trying to present a certain image of ourselves, when the reality is altogether different. The stakes in real life are much higher, though.

There’s a name for this kind of behavior; it’s known as compensatory consumption. Compensatory consumption is defined as an attempt to offset deficiencies or a lack of self-esteem by spending money, often on so-called status symbols. Research suggests that people are most likely to engage in compensatory consumption when they experience a feeling of powerlessness. This feeling could be a result of getting passed up for a promotion at work or struggling to make friends, for example.

Whatever the reason for the behavior, compensatory consumption often ends up as an attempt to buoy your image among peers. Perhaps it’s taking a trip you can’t afford because you don’t want to disappoint the friends who have invited you. Or maybe you offer to pick up the lunch tab, even when it will bust your budget. Buying a pricy gift or throwing a lavish party—because you don’t want to appear cheap—fit into this category too.

Scrambling to pay your monthly bills may be a short-term consequence of compensatory consumption. In the long-term, you could end up getting stuck with payments that you can’t afford to make. Maybe most significantly, making decisions based on how others perceive you can chip away at your overall economic well-being. It can also keep you from reaching your personal financial goals.

The best way to avoid the trap of conspicuous consumption is to know what you want. Your goals, not marketing messages or pressure from those around you, should be the roadmap you follow.

CCCS/ACCE –American Center for Credit Education
Carey Denman

Use Your Goals to Guide Vacation Planning

I took a month long backpacking trip to Europe during my last year of college. I traveled on a bare-bones budget, staying in sometimes-seedy hostels and using an oversized sweatshirt as a towel when I realized that linens weren’t provided. Still, despite my small budget, I managed to see the changing of the guard at Buckingham Palace and ring in the New Year to the sound of Big Ben’s chimes. I visited Stonehenge and Shakespeare’s birthplace, Stratford-upon-Avon. I also ambled through cobblestone streets and saw a Broadway musical.

When the trip ended, it wasn’t any of these things, as interesting and magnificent as they were, that made the most significant impression on me. The best moment of my trip didn’t involve a well-known tourist destination—a grand cathedral or a castle—but a steaming baked potato and an ice-cold mug of ale enjoyed alone in a snug corner booth.

It was here, in a pub called the Eagle and Child, where C.S. Lewis and J.R.R Tolkien sat discussing literature, writing, and life. These discussions contributed to the final form of Lewis’s Narnia books and to Tolkien’s Lord of the Rings series.

A simple lunch in this place was profoundly personal for me. The experience reminded me that the essence of a vacation isn’t necessarily jumping from one hot spot to the next. Rather, the best vacations are often rooted in the simplest pleasures and driven by a desire for respite.

Vacation, from the Latin vacatio, has its origins in the word freedom. If freedom is the basis of a vacation, the last thing it should do is leave you frayed or saddled with debt. If you’re planning to take a vacation this summer, start with some basic questions: What kind of vacation will give you the greatest sense of freedom? What is the goal or purpose of your vacation?

You might be tempted to answer the question glibly: To get away. I would counter: To get away from what and why? A vacation simply for the sake of taking one can leave you more focused on destinations and arrangements than on the pleasure that it can bring. It can also leave you overspending if you get caught up in a must-see mentality.

When you start planning a prospective vacation with a goal in mind, you may realize you want to create a certain feeling, which doesn’t necessarily depend on any particular location. If your vacation goals are location-specific, then you can prioritize your spending based on what you want to achieve.

For example, if you want to travel abroad, ask yourself why. Is it to experience another culture? Understand your ancestry? See magnificent architecture? If your true desire is to experience another culture, then you might consider a volunteer vacation, where you live and work in the place you’re serving. It’s a full-immersion experience that can be relatively inexpensive.

If it’s a beach vacation you’re after, start again with the same question: Why? If you’re looking to relax, find a house for rent by owner. These types of homes are perfect for groups looking for inexpensive, beach-front accommodations. You’ll typically find fully-equipped kitchens so that you can prepare all of your own food. You can sleep in, build sand castles to your heart’s content, and stroll down the beach at sunset.

You can apply the same question to any kind of destination, whether it’s camping a few miles from home, a major theme park, or a trip to see relatives in another state. Get your goal at the forefront of your planning, and you might just find that you don’t even need to leave home to enjoy a vacation.

CCCS/ACCE –American Center for Credit Education
Carey Denman

Simple Ways to Create a Landscape You Love

When we moved into our home five years ago, I remember looking at the rolling expanse of dirt, dotted with scruffy patches of grass and wayward thistles. Other more experienced gardeners might have seen a blank canvas, but I felt overcome with landscape anxiety. An impossibly small landscaping budget and a file full of seemingly perfect garden images only made matters worse.

From the start, I knew I had to make peace with Mother Nature. This meant creating a landscape that could bear harsh temperature swings, little rainfall, and droves of hungry deer. It also meant raising my weed tolerance if I didn’t want to institute a serious spraying regimen or commit to hand digging a thousand dandelions.

I didn’t know it at the time, but these obstacles were forming my landscaping philosophy: beauty without perfection. After I got over the idea that my yard needed to be magazine-worthy, I could think about what I really wanted my landscape to do and be.

I knew I wanted a cottage garden landscape, with an abundance of flowers and vegetables and a place to enjoy them. From here, I could decide the best way to achieve this. I haven’t followed a rigid plan, but I have relied on several ideas that have helped my landscape take shape and that have kept my landscaping budget in check.

Spend your time and money on landscaping features that will bring you pleasure. If you need to create a landscape from scratch or want to punch up what you’ve got, start by setting some priorities. What landscape element will bring you the most joy? A lawn that looks like Astroturf? The same climbing roses that grew on your grandmother’s arbor? A fountain, fire pit, or pergola? From here, you can think about the best way to reach your landscape goals.

View landscaping as a process. The best landscapes evolve over time and anticipate future wants and needs—there is no such thing as an instant landscape. I always buy as many small plants as I can afford, rather than buying more mature and expensive specimens. I also tackle one or two landscape projects each year. This year, the plan is to build a roof over a back patio for some much-needed shade and create a small playhouse for our children. Make a list of what you want to accomplish in your landscape and choose the top two or three priorities to tackle this year.

Use materials readily available to you. I am fortunate to have an abundance of natural slate rock that we used for garden beds and paths. The horses in a nearby pasture supply our compost needs. A pile of cedar milled from old power poles became a garden shed and a picket fence. Look around your home and your neighborhood. What is available to you that you can put to use in your landscape?

Enhance what you already have. Paint worn patio furniture a vivid yellow or turquoise, repeating the same colors elsewhere in your landscape. Use specialty paint to splash color on a boring cement patio. Divide plants to expand your plantings. Think of ways you can incorporate existing plantings or features into your plan. Add shutters, painted trim, and a small window to a plain garden shed, for example.

CCCS/ACCE –American Center for Credit Education
Carey Denman

Practicing Gratitude is Worth the Effort

My husband was recently helping me with the spring garden chores, which involved top dressing beds with compost and cutting back the perennials within an inch or two of the ground. He was hard at work on a catmint, one of the most onerous plants to deal with in my garden. Bent over a dried tangle of woody branches, he looked up, pruners in hand, and asked, “Why did you even plant these things?” I responded with my gardening mantra, “Because I love what grows.”


In my prairie garden, where moisture tends to be scarce and hungry deer can be plentiful, catmint is a sure thing. It is tough as nails, blooms profusely, hides the fading foliage of other plants around it, and the deer don’t touch it. Yes, it tends to grow out of bounds, spreading seedlings into the gravel driveway and all along the path, and gives me blisters when I cut it back each year, but it grows—beautifully.

Loving what grows keeps me focused on the good in gardening, makes me grateful that I can sink my hands into the dirt and coax something, anything into bloom. It might take practice, but “wanting what you already have” is a good principle for life. In other words, practicing gratitude is worth the effort.

According to the research of psychologist Robert Emmons, the greatest reward for being grateful is a happier life. In several studies, Emmons asked three separate groups to keep a journal for a period of ten weeks. The first group kept track of what they were grateful for; the second group wrote down what they found irritating or bothersome; and the final group was instructed to write about something that had an impact on them.

At the conclusion of the study, the participants who focused on gratitude, by paying attention to and recording the good things that happened to them during those ten weeks, reported a higher level of well- being; they were generally happier and more optimistic, even sleeping better and exercising more. Other more objective data has shown that practicing gratitude has direct health benefits, which include lowering stress levels and moderating blood pressure.

If it makes good sense to practice gratitude, what’s the best way to do this? It doesn’t have to be a formal exercise in writing things down. It’s really about finding a way that you can acknowledge the good things in your life. At our house, this often happens at the dining room table, where we ask our children to tell us the best part of their day. Just last night, our five-year-old reported, “We got two jelly beans today. We’re really lucky kids.” It’s hard to be a cynic when I’m face-to-face with this kind of child-like thankfulness.

The next time you’re at a stoplight, resist the urge to pull out your cell phone or fiddle with the stereo. Instead, make a mental list of everything you’re thankful for. Or do the same when you’re brushing your teeth or taking a shower. However you do it, make gratitude a ritual. When you do, you’ll learn to want what you have, and you’ll be much happier for it.

CCCS/ACCE –American Center for Credit Education
Carey Denman