As a Financial Planner, I get to see the good, the bad and the ugly on a daily basis when it comes to financial habits. I was recently reminded that most of us go through life seeing only our own spending and saving habits and we share them with no one else; in some cases, not even our spouse. Our personal financial affairs can become a lonely isolated island filled with worry and uncertainty. Common sense dictates that nothing good can come out of this kind of scenario and yet many of us find ourselves there, hoping for a raise, break, or windfall that is probably totally out of our control.
Financial habits are hard but not impossible to change. Here are some steps we can take:
- Take Responsibility: We must take ownership of our situation, good or bad, it is what it is. A change in attitude should start with gratitude. One in five people in our world live on less than $1.50 per day in complete financial hopelessness so we should be thankful for the financial options available to us. Make a list of the things you are grateful for and THEN make a list of financial challenges.
- Share Information: After taking your financial worries out of your mind and onto paper, share them with another person. As you share information with your spouse, advisor, or close friend, you should feel a weight being lifted from your shoulders. Your financial problems will not sound nearly as bad out loud, and it’s this continual reshaping of the issues into different mediums of communication that will help you make sense of it all.
- Seek Advice: As a Certified Financial Planner™ Practitioner, I have a bias towards personalized professional financial advice but, admittedly, there are other options. The internet is, of course, chocked full of resources and there are many TV and Radio guru’s filling the airwaves and seminar rooms with generalized but, in many cases, relevant solutions. The bottom line: do your homework and understand you get what you pay for.
- Prioritize: I have yet to meet a client who has the financial resources to accomplish all of their financial goals. We ALL have to prioritize according to our values and make financial decisions accordingly. Remember, alignment must be achieved with YOUR values, not your advisors values, or values you perceive to be the “right” ones. Don’t skip this step because this is where your financial habits really start to change!
- Simplify: Once you have your priorities lined out, focus on the important stuff first and knock it out step by step, piece by piece. Push through complicated and difficult issues by simplifying your actions with the understanding that a perfect solution rarely exists. Change requires action so we MUST simplify our steps to eliminate procrastination and indecision from the process.
- Automate: Automation goes hand-in-hand with Simplification. Try to make financial decisions once instead of monthly. Automate your loan payments and savings to save time and insure you stay on track. Just about every bank has some type of automated bill pay and transfer capability that can be customized to your needs.
- Evaluate: I like to re-evaluate with my clients every six months. Quarterly is too often and I believe valuable momentum is lost between annual reviews. A solid evaluation includes a look at progress made, updated financial statements, and a plan for what needs to be accomplished over the next six months. Evaluate, adjust, and go!
Remember, having money challenges is better than having no money at all. Critical Financial Events will occur for all of us at some point regardless of whether or not we are properly prepared. The steps we take today to change will make a huge difference over the course of our lives to better prepare us for the known and the unknown financial hurdles we will face.
Rob Schulz, CFP®
By Rob Schulz
Rob Schulz, CFP® is a Principal with First Texas Financial Services, Corp., and a Registered Representative through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. He is also an Investment Advisor Representative through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and FTFS are not affiliated. These are the views of Rob Schulz and not those of Cambridge, FTFS, or any of their affiliates. Material discussed herewith is meant for general illustration and/or informational purposes only, please note that individual situations can vary. Therefore, the information should be relied upon when coordinated with individual professional advice.
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