My Debt Diary

Financial Book of the Month – The Slight Edge

November 19, 2018

As I make progress towards becoming debt free, I am making it a priority to educate myself more about money. I want to have a better understanding of handling finances, financial mindsets and many other useful topics. My favourite way of doing this is reading. This is a part of my journey that I’m particularly keen to share with you as I believe you could get a lot of value from it. This month I would like to share The Slight Edge.

Finance book of the month – The Slight Edge

This month, I’m sharing a book with you that is not specifically based on finance, however it has everything to do with each of our financial journeys. Let me explain.

The slight edge is not just the title of Jeff Olson’s book; it is an attitude to life. It encompasses the principle that small daily habits, both positive and negative, have a long lasting effect on our lives. Throughout his book, Jeff conveys the importance of having an understanding of these daily habits and the power they have in determining whether we are each on the road to success or failure.

As an example, consider eating habits. An individual can make the decision to eat healthy food or unhealthy food. If they make the choice to eat a healthy diet for one day, this may have no real impact on their weight or fitness. However, if they eat well every day for a year we all know that this will have a very positive impact on all aspects of their health.

By the same note, if an individual chooses to eat a very unhealthy selection of food one day they will see no instant impact. Eat an unhealthy diet every day for an entire year however and they will definitely witness it having a very negative impact on their health and wellness.

Daily Debt Habits

We can of course apply these same principles to debt. Say we decide one day, to pay £10 towards our debt. It feels like it has very little impact. What if we turned that into a positive daily habit and paid £10 towards our debt each day? We might not see much of a difference in our totals after a week or even a month. However, one year down the line our debt total will have been reduced by £3650. You don’t need me to tell you how incredible that would feel.

For the benefit of your debt journey, I think it is also healthy to recognise the negative daily habits which have led us to this moment in our lives. For myself, it was snap shot borrowing decisions and the “oh I can pay it off later” attitude which resulted in my debt total. Instead of looking to the future and the impact that those decisions would have, I put more emphasis on my need for money now, in that moment.

Maintaining Progress and Success

Whilst many of us are able to grasp the importance of positive daily habits at a basic level, it is the next point that Jeff makes that has really stuck with me and that I will be taking forward in my own financial journey once I become debt free. Jeff explains that in life the majority of us sit on a sort of rollercoaster of success and failure.

As we work towards a goal we adopt positive habits that we know will help us to get there. Using a budget, tracking spending and using the debt snowball are all great examples of this. Once we reach our goal we celebrate our achievement, as we should. Then, however, we fall out of practice. When we do this, we are at danger of going backwards and falling into negative habits once again. There is a key point here in our journeys where we need to remind ourselves of the incredible impact our positive habits have had on our lives, and keep practising them despite having already achieved our initial goal.

I could go on for many more paragraphs talking about The Slight Edge and it’s incredible message. I encourage you to read it, absorb every page and really take on board Jeff’s advice. You are entirely capable of reaching success. It just starts with one positive habit today.

You can find The Slight Edge here on Amazon. (This is an affiliate link. I receive a small commission at no extra cost to you if you choose to use it. Thank you!)

 

I absolutely encourage you to begin reading (or listening to audiobooks) as part of your debt free journey. Not only do you learn something as a result, but it also allows you some time to switch off from your debt and all the other goings on in life and just focus on the book in hand.

You can read my previous Finance Book of the Month post here.

Finance Book of the Month - the slight edge - pinterest

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My plan for retirement while I pay off my debt

October 12, 2018

My Debt Diary is a place for me to share my debt free journey. I update you every two weeks on my progress and share tips and advice as I build my own financial knowledge along the way. It is very much about what is happening now and in the short term. But what about the long term? I am very focused on my mission to pay off all of my debt, however I have to think about the future too. Here is my plan for retirement while I pay off my debt.

My savings amount will be progressive and will grow once I am debt free. Of course as I am currently focusing all of my money into my debt payments right now, it can be hard to find the funds to put away into savings at the same time. None the less, the sooner I have my plan for retirement in place the better.

 

My plan for retirement

The first thing that we tend to think of when it comes to saving for our later years is of course a pension. As I am self-employed my pension is not something that is set up for me automatically. Once I began making some money through my freelancing work I knew it was time to see what my options were.

For some people, looking for a pension will mean studying all of the numbers and percentages on offer in detail, looking through every provider available. For me, it meant asking for some recommendations and choosing the provider that scared me least. Some financial advisers might shake their head if they read this. You should go for the best rates I’m sure, but we all need to take our own approach.

What I really wanted was a platform that allowed me to pay in easily and keep track of my total. Knowing that I would want to increase my contribution amount as my debt total went down, the thought of having to make phone calls and apply for changes with forms and things was just not on. I need to be able to click a few buttons and know exactly what’s going on.

I currently pay £25 each month into a private pension with Nest. (I’m not affiliated with them, but so far so good). This is of course a very small amount, but it is adding up quickly. Since I started earlier this year, it has built up to £229. If I continue with this, it will grow to give me £1500 per year when I retire. That wouldn’t buy me very much of course, but that’s not the point.

The important thing is that I’ve started and now the compound effect can begin to work. I plan to increase my pension contribution to £150 per month once my debt is paid off. Whilst there are many ways to save and invest money for the future, setting up a pension was a priority for me. I will put other things in place once I am debt free, but I wanted to have a pension in place for my own peace of mind.

 

Do you have a plan for retirement? What have you got in place?

Victoria of lyliarose.com has written a great post about why you shouldn’t rely on a state pension and I definitely recommend you have a read!

 

My plan for retirement while I pay off my debt - pinterest

 

Leave a Comment · Goal Setting, Money, Money Saving

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