The Thumbtack Theory

My Dad has this saying, “Stupidity is continually doing the same thing and expecting different results.”

We all have our moments of stupidity. I had another moment today as I attempted once again to hang my son’s wall decorations back on his wall. Somewhere in my life I became convinced that the best way to hang anything is with thumbtacks…. I know I should get the hammer and put a nail in the wall. It’s just easier to use tacks. And more forgiving if you accidently hang the picture 2 inches too low. However, tacks definitely have their down side like they don’t hold very much weight. Another down side is they can easily bend when going into the wall. The particular picture I was hanging now has about 14 tack holes in a little circle. For some reason, it just doesn’t want to stay 🙂

You may laugh at my “stupidity” (I definitely do) but many of us do the exact same thing with our finances. We know that we need to find a permanent solution but we just keep “jimmy-rigging” our finances with thumbtacks and expecting different results. So when it comes to making a major life change and adjusting your budget and your finances to fit, don’t try to do it in a makeshift, jimmy-rigged way. There is only one way to really succeed whether you are needing to down size your life, or pay off debt, or just overhaul the way you handle your finances: Throw out the thumbtacks, get out the measuring tape, a hammer and nails, and do it the right way.

And the right way to correct an out of control financial life is to get your budget in order. So if you have been “borrowing” from your 401K to make it through, or you are up to your eyeballs in credit card debt, or if you have resorted to selling plasma to make ends meet (my husband did this in college ~ they do pay $80 for it, but it really is a desperate measure 🙂 … there has got to be a better way!) then may I suggest that your finances may be hanging precariously from thumbtacks. It is time to take a realistic look at your finances and sit down and evaluate your budget once again.

If you are new to Budgeting For a Better Life and have never taken the time to set up a budget, then this is a great day for your financial life. If you have already set up a budget and are just needing to make some adjustments, then pull out the thumbtacks and let’s do it right. Every dollar that you spend has to come from somewhere, so having a plan for the “somewhere” can really impact your financial situation.

Sometimes we get into that “jimmy-rigging” mode with our finances because we just don’t want to face the cost of what we are actually spending. For instance, there are many people who don’t want to know what they are actually spending on dining out. If they actually sat down and did the math of eating out at $30 a meal every night they would realize that they are actually spending over $900 a month on food… and that doesn’t even include other groceries. If you are living on a limited budget, this is one of the fastest slides into debt that you can devise. It seems so much easier to pull out the credit card so you “don’t have to face it,” but the truth is you are killing your financial future (and probably your arteries.)

If you really want to take back your financial life, you are going to need to look at those habits and put yourself on a budget. This is why I am such a firm advocator of using the cash/envelope system. When the money is gone, you are forced to either determine where more money is coming from (is that meal out worth some plasma? 🙂 just kidding) or eat at home. It is hard to set boundaries when you aren’t used to them and so that physical boundary of your cash envelope being empty can be revolutionary in retraining your spending habits.

As for me, I am going to go get a hammer and a nail and hang the picture the right way. I’ve got to do something different if I want a different result. And if you want to see a different result in your finances in 2009, then it’s time for you to do something different as well. So get out the hammer (A Plan to Stop Juggling), bring out the nails (Finding Balance ), and a measuring tape (Directions for the Journey ), and get your budget in order. It takes a little more effort, but take it from the thumbtack master, I would much rather pick a picture off of the ground than have to try to pick my financial world up off of the ground. Even I realize that there are some things that thumbtacks just won’t hold.