Starting Strong No Matter Where You’re Starting From
As we jump into a New Year, it’s a natural time to evaluate your goals and what you’re looking to achieve over the next 12 months. While many people tend to focus on physical, emotional, and mental health goals at this time of year – it’s equally as important to take time to evaluate your financial health as well.
Below are a few of our top tips to start the year strong, regardless if you’re starting out in your career, a retiree, or anywhere in between. It all starts with evaluating where you are today and where you want to be tomorrow, so you can create a confident plan to get you there. So, grab a coffee and your notebook, and let’s dig in!
Step One: Understanding your relationship with money
Your relationship with money was forged at a very young age, as you watched how your parents were able to get what they needed or found ways to stretch their dollars. It’s also closely tied to your personal values, meaning you’re likely to spend more on those things that bring meaning to your life. That makes your relationship with money very complex, but not a complete mystery. By understanding your relationship with money, you’ll be able to understand why you make the choices you do – and if they aren’t your best options, you’ll be able to steer yourself in a new direction.
Take a moment to think about your personal relationship with money, and how you act toward your finances on a daily, weekly, or monthly basis. What comes to mind?
Now it’s time to write down exactly how you feel about money today, and what a healthy relationship with money would look like for you (remember, it’s different for everyone). These statements will be your compass, as you work to create a positive money mindset.
Here are a couple of examples to get you started:
How you might feel: When I think about my finances, I often worry that I don’t have enough. As a result, I often get nervous and I’m afraid to spend, or when I do, I feel guilty.
How you might want to feel: When I think about money, I want to feel confident. I know I have to be careful about how much I spend, but I am in control of those decisions.
Why it matters
Having a healthy relationship with your money means you can make your money work for you. It means you’ll live a life with less stress, and you’ll see the big-picture as you make purchases and investments that support your current and future goals. Remember, your finances are highly personal. It’s all about finding the balance that works best for you – based on your relationship with your money, the goals you’ve set for your future, and the plan you’ve created to get you there.
Need help with this step? Reach out to us and we can help.
Step Two: Know Where Your Money Goes
Once you understand the underlying emotions that might impact your spending and saving habits, your next step is to take stock of where your money is going every month so you can create a realistic budget that helps you meet your goals. Remember to do this step without judgement and with a lot of grace. Here’s how to do it:
For at least a month, keep track of every purchase you make. Keep every receipt so you don’t lose track of purchases and the amount you’ve spent.
Organize your expenses according to category (rent, utilities, entertainment, etc.) and start to create a monthly spending summary.
Next, turn this spending summary into a budget – look first to see if you’re living within your means, then find ways you can trim your spending that won’t make a big impact to how you live your day-to-day life.
Why it Matters
Two very interesting things tend to happen when you don’t track your spending and don’t have a budget: Your money seems to disappear, as you forget where you spent it, and you tend to way underestimate how much things actually cost. It’s important to know where every dollar is going so your money is working for you.
Once you get the hang of budgeting, you’re in control. That means, you can make informed decisions about things you are buying and saving for, knowing that it moves you towards your ultimate goals, aligns with your personal values, and keeps you on track.
And, if you need more convincing, budgeting and expense tracking can help you reframe your mindset. If you’ve budgeted for a latte or a gym membership, or new clothes every payday, these aren’t frivolous purchases – it’s enjoying life in the moment and taking care of your emotional, mental, and physical needs.
Need help with this step? We’ve got you covered! Simply reach out and we’ll share our expense tracking and budgeting worksheet.
Step Three: Let Go of the Comparison Game
If you find yourself thinking about what you should be doing, it’s a good bet that you’re comparing yourself to others. Instead of moving to a position of strength, this often leads to insecurity, as you’ll always find someone who seems further ahead than you.
If you catch yourself in this trap, take a deep breath, and take a peek at your plan. As with everything in life, it doesn’t matter what everyone else is doing. You are on your own journey, so it only matters that you’re working toward your goals. Keep yourself moving forward and taking positive, intentional steps that move you toward your goal.
Step Four: Don’t do it alone.
Starting strong and staying strong aren’t always going to be easy – so it can help to have a partner in your corner. Whether a trusted friend, family member, or a financial advisor, this person should help you be accountable to your goals, be a sounding board as you work through your plans and ideas, and perhaps most importantly be a champion who reminds you that you can do it!
Need a helping hand? Let’s talk! We’re here to help you start and stay financially strong.
