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9 Specific Steps to Improve Your Money Relationship
1. Build Better Money Habits
The New Year is less than a month away and you may be starting to think about your resolutions. Was 2016 another year where you were always worried about money? Do you feel that it is holding you back?
You may feel as though you look successful on the outside but on the inside you are living in a haze about money. Maybe you feel conflict, shame, or secrecy in your relationships. Or do you have an overall feeling that there just isn’t enough.
I know that feeling. I have been there. It wasn’t until I started to think about money and emotions in a practical way that I started to live a more authentic life. I addressed my money relationship and now I want to invite you to take that step to do the same
2. Set Specific Actionable Goals
I know goals make a difference. They keep me focused and give me the determination, commitment and passion to accomplish them. If I keep my goals in my head they simply don’t happen. I can walk from one end of the house to the other and forget why I’m there.
Goals help me:
• Determine a sense of meaning, purpose and direction
• Gain clarity to decide what’s important
• Determine what’s important versus what’s relevant
• Achieve more and keep focused
• Increase my motivation to succeed
• Improve my self-confidence
Goals are certainly motivating, but not all goals are created equal: studies have found that specific and challenging goals led to higher performance than easy goals, ‘do your best’ goals, or no goals.” So if you want to give yourself a good reason to improve your financial habits, you will need specific, actionable goals.
If you plan to make your goals financially related, here are some suggestions:
· Set a goal to become debt free. Start by making up your mind not to incur any more debt. Leave your credit card at home. Next, summarize your credit card debt, including the balance, interest rate and minimum payment due. Call your creditors to request a lower interest rate. Pay more than the minimum on each account. Once an account is paid off, take the extra money and pay it towards another credit card.
· Track your spending for 30 days. Whenever you spend money, write down how much you spent and what you spent it on. Summarize your purchases to determine where you can reduce your spending. I guarantee you’ll find something you’re spending more money on than you thought.
· Organize your financial records. Purge last year’s financial records and get organized for the upcoming year. Get your shredder out and shred old receipts, bills and paperwork.
· Rearrange your financial records, business records and so on. Next purchase a two-drawer file cabinet and some folders.
· Determine your net worth, the value of your assets minus your liabilities. Summarize your assets and liabilities, including the account number, name and contact information of each institution.
· Open an Individual Retirement Account (IRA) or increase the amount you’re currently contributing to an existing IRA. In 2017 you can contribute $5,500 annually if you are under age 50 or $6,500 if you are age 50 or older. Determine the amount you can afford to contribute. Set up an automatic deduction from your paycheck or bank account.
· Make an appointment with an attorney to prepare a will, a living will and durable power of attorney . Approximately 70% of Americans don’t have a will, which means the state determines how their assets will be distributed and their children’s guardian.
· Establish a contingency fund for unexpected, or emergency expenses. Consider to open it in a financial institution that’s not easily accessible makies it harder to dip into. Set up automatic deductions from your paycheck or bank account. If necessary begin with a small amount, but strive to have a balance of three to six month’s worth of living expenses.
· Read a book, start a book club, join an investment club
Attend a financialliteracyactionnetwork.org webinar, workshop or register for ecourses; check out Brandy Speer Wise a Certified Financial Education Instructor on Blog Talk Radio; take a class on money, sign up for an online newsletter, etc.
Don’t wait another minute, schedule time for yourself to determine your goals for 2017. Remember – write them down and be sure to include a targeted completion date. “Goals are dreams with deadlines.” Diana Scharf Hunt
3. Remove Any Barriers to Financial Success
Now that you have a goal, what’s stopping you from getting there? Maybe it’s your Social Media friends encouraging you to spend more money. It could be your coffee addiction that keeps you spending on your $5 a day habit. Or your resistance to look for a new job even though you’re underpaid. No matter the barriers between you and good financial habits, the first step is to identify the problem. Be honest with yourself and take action to change those behaviors.
4. Baby Steps
Take the slight edge appoach to change your financial behavior, It is about the little things that we do every day toward the achievement of our goals. Want to start spending less? Make a habit of quickly checking your bank balance on your phone before you make an unplanned purchase. It only takes a couple seconds, and it’ll help you make a more informed decision. Creating new habits is hard. Habits are usually built over weeks or months of repetition, and motivation is the challenge.
5. Automate Your Finances
Possibly the best way to build great financial habits is to put the decision-making in someone else’s hands. If you can put it in the hands of a computer, great! A machine won’t ever be tempted by a new pair of shoes or the latest high tech gadget. Automation makes the process much easier and gives you one less thing to worry about.
6. Target a Money Challenge
There’s something about facing a challenge that’s especially motivating for a lot of us. If you’re one of those people, taking on a financial challenge can be a big help in developing better money habits. We have looked at a number of money challenges including the 30-day no-spend challenge and the 52-week savings challenge, both can help you establish better habits.
7. How About An Attitude Adustment About Money?
The same way you would improve any relationship with love and respect. You can’t enjoy a good relationship with money unless you’re willing to love it, through thick and thin.
Love is a choice and it’s purpose is an emotion, as well as a behavior. When we choose to love our cat even though he scratched us, that’s love. Or when we show patience, energy or resources in helping our child to solve a problem; even though we might be running low on all of those qualities—that’s also love.
8. Improve Your Financial Knowledge
Knowledge is power. The more you know, the more likely you are to be able to make progress and meet your goals — this is true whether you’re working on an advanced degree or trying to establish better money habits. Fortunately, there are a lot of great ways to further educate yourself about money out there
9. Start Today and Take ‘Some Action’ Everyday!
Some Topic Sources
National Financial Educators Council (NFEC)
Jim Rohn: Setting Goals
Brian Tracy: Goals
PC Magazine: Best Mobile Finance Apps
FLAN works with people/communities/organizations/businesses who want to embrace and join forces to bring the vision of financial education (personal money management) to themselves, their families, employees and communities
Course participants will learn how to properly manage their money, save, invest and grow it. It’s about dreams and goals!
Download our complimentary 60 to 90 minute courses for all ages.
Apply techniques that work and start to see immediate results. Full course covers key areas designed to help you achieve your personal financial goals. Money management program course overview:
· Financial Psychology
· Accounts and Budgeting
· Credit and Debt
· Banking Essentials
· Skill Growth
· Investment Basics
Financial Literacy Action Network
Brandy Speer, Executive Director
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