Read on Twitter
Tuesday thoughts: Let's chat about household financial standards and why they matter. Most people don't set standards (rules) for their household's finances, but it's an incredibly useful process which is a natural extension of the other standards we have in our lives. 1/
What's a standard? Look outside of your finances to find some relatable examples. Think of the unwritten rules of your life, & how they positively impact daily living. From not using tobacco products, drinking water daily, to saying please & thank you, we all have standards. 2/
Some of these standards are deep-seated and provide us great clarity. For instance, a vegetarian doesn't have to reject bacon each meal. It's a non-issue for them. They don't compromise. There's no gray area. You can establish similar structure in your financial life. 3/
BUT, there's a giant but. You have to adopt the structure as your truth, and not an option. In normal financial times, you can't tolerate a lack of adherence to your own policies. This is where most people who try setting standards fail. As Yoda said, there is no try. 4/
You know how certain people always hit you with a "my grandma always said...." and then live their life in accordance with grandma's mantra? That's a standard. That's what you have the ability, and duty, to do. I fully understand if your current standard is simply "survive." 5/
That's a great standard right now, frankly. Because it removes the possibility of you giving up your attempt at survival. But when this sucker (the economy) turns around, put standards in place as you build from the ground up. 6/
There are three financial standards I love, and have guided many people to a peaceful financial life. 1. Save the CORRECT amount for retirement. 2. Maintain at least a three month emergency fund. 3. Don't carry credit card debt. 7/
Not that you do or should care about what I personally do, but those are my first three standards for my own household. They are the (bowling) bumpers to our decision-making. We refuse to violate those standards, which makes making decision MUCH easier. 8/
Setting standards takes pressure off of you. Read that last sentence again. Standards don't make your life more difficult, it makes it less difficult. Of course getting your finances up to speed to match your standards is difficult, but once you get there, life gets easier. 9/
When my first book came-out in 2006, I ordered pizza to celebrate with some friends at my office building. One of my friends, the most handsome, in-shape 50 year old you've ever seen, declined an offered slice. 10/
At first I was like "Dave, come on!" But then he calmly said "yeah, I don't do that." He was over 20 years my senior, but his standards made his life EASIER, not more difficult. He wasn't making a decision by saying no to me. It was simply his standard. 11/
I have a high school friend who opened a barber shop and began cutting hair right out of school. He told me a few years ago his dad hold him to set a $10 bill aside EVERY DAY, he did, & had done so for nearly 20 years. He had roughly $75,000 in cash. It was his standard. 12/
An old client of mine and her wife donate 15% of their substantial household income to a LGBTQ youth support organization, every year. It's their uncompromising standard -- Rules which they voluntarily refuse to break. 13/
When you begin to rebuild what has and will be lost, rebuild your financial life with standards in mind. These standards will serve you in good times and in bad. They will provide the ultimate judge and jury to your decision-making process. 14/
Maybe the people who raised you passed on some of their standards to you, & maybe they didn't, but you most certainly have the chance to establish your own and model them for the people you are raising. Ideally, establish these standards with all the people in your household. 15/
When it comes to your current financial reality, as it relates to COVID-19 and the recession, you've done NOTHING wrong. You aren't to blame for your reality. However, you CAN add a buffer between your finances and the next downturn, by adopting financial standards. 16/
In these crushing financial times, some people who already have household standards are taking some hits, but these standards are still protecting them from their problems getting as bad as they would be without standards. 17/
When you rebuild, rebuild with standards which you refuse to compromise. Feel free to adopt my personal manta, if it helps. Make tomorrow easier. Fight. 18/18
