The Four Agreements & Personal Finance

Today I have an another awesome guest post from Tonya at Budget and the Beach. Enjoy!

One of my favorite little handbooks for life is The Four Agreements.

If you’re not familiar, here they are in simplistic form:

1. Be Impeccable with your Word: Speak with integrity. Say only what you mean. Avoid using the word to speak against yourself or to gossip about others. Use the power of your word in the direction of truth and love.

How it relates to personal finance: This is the main one I want to focus on…because it applies to a lot of PF blogs I read, and it includes myself. Coming off a very spendy August, I vowed to make September incredibly frugal because freelance work was slow last month, and I’m traveling to Portland/Seattle this month.

But as much as I sometimes vow to have laser-like focus on being fugal, I often find myself getting lazy and not staying true to my word.

For instance on Labor Day I went out to breakfast, and did some window-shopping at the street fair looking for a necklace (I never found one so therefore never bought one, but would have in my moment of weakness). Not exactly what I call frugal as it’s a definite NOT NEED.

The point is this: if you say you’re going to do something, then do it! If you’re buried in debt but decide to buy new pillows for your apartment, then you need to own up to that and not say, “I’m doing everything I can to pay off debt!” Again, I’m guilty of this kind of behavior myself, so I’m not just trying to be harsh on everyone else. :)

So it’s time for me…and maybe you, to really, really start trying to be impeccable with your word.

2. Don’t Take Anything Personally: Nothing others do is because of you. What others say and do is a projection of their own reality, their own dream. When you are immune to the opinions and actions of others, you won’t be the victim of needless suffering.

How it relates to personal finance: I’ve often times thought the Universe was conspiring against me, like when I had to spend 5k in car repairs this year after my Subaru died a couple times in the middle of the road. I mean I’d JUST gotten ahead with my emergency fund and had paid off the last of my debt dammit! Why?!?!?

Whether the Universe was mocking me or not, the deal is life is just messy sometimes, and random stuff (like your car dying, computer blowing up, unforeseen medical expenses) that cost money happens to EVERYONE, not just you (although it often feels that way). Nothing says “you need an emergency fund” more than that!

Last year I had too small of an e-fund and ended up having to put a root canal and crown on my credit card, and it felt like it took forever to pay off. So I built up my e-fund over a year and low and behold could pay cash for my car repairs. Granted it’s no fun to use that fund at all, but it’s so much better than going into debt.

3. How it relates to personal finance: Although the definition is slightly different, we often make assumptions about how other people are doing in life, and we are often times wrong. So when that jealous green-eyed monster makes an appearance because your good friend is taking a month-long vacation in Europe, you don’t know what circumstances got them there. Maybe you’ve had specialist advice from a company like Bower Retirement Services to boost your retirement fund where they cashed it out and have no savings whatsoever, or a huge amount of debt. Or maybe they’re trust fund babies (in which case I’m insanely jealous!).

You never know…

4. Always Do Your Best: Your best is going to change from moment to moment; it will be different when you are healthy as opposed to sick. Under any circumstance, simply do your best, and you will avoid self-judgment, self-abuse, and regret.

How it relates to personal finance: Well I think this one is quite obvious. We all mess up…sometimes we mess up huge! Don’t let one misstep derail you from achieving your personal finance goals. Get back on the horse immediately and keep going!

If you had to write a fifth agreement, what would it be? 

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