How To Take Control Of Your Finances
I can’t believe that it’s already January 10th. Part of me is blown away by how fast January is going and the other part isn’t complaining because I’m ready for warm weather!
Regardless of a new year, month, week or day, it’s time to take control of your finances. I remember the first time I did this. I’m not talking about within the last few years when I moved my business online only. I’m talking about when I was 18 or 19. I was living in San Diego as an active duty Marine. It was around 2007-ish. I was so naive and had NO idea about how to handle money. I remember having a discussion with a friend who told me that even if you only have $1 in your account, you can still get gas with a debit card. I mean, what kind of advice is this!
Eventually I moved off base and needed furniture. So I got a credit card through the furniture store and never paid it. I had a credit card for the Exchange on base and I never paid it. It wasn’t that I didn’t want to, it’s just that I NEVER THOUGHT ABOUT IT!
It makes me cringe a little thinking about this.
During this time I would overdraft my account. I would NEVER check my bank statements. I didn’t even know how much money I made a year. Honestly, how insane is that? Or if it doesn’t seem insane to you, I’m glad you’re here!
Most of our initial money habits are based upon how we are raised. Did your parents teach you good money habits? Or did they not talk about money? We were a “we’re not going to talk money” household. My parents grew up in an age where you just didn’t talk about money. It was just normal to them.
So what was my first reality check back then? I can’t remember exactly. But I do remember pacing in my bedroom, on the phone with the furniture store credit card company, trying to explain why I hadn’t made a payment. It wasn’t immediately after this that I got my act together but it was soon after.
Since then I have definitely faltered. We won’t even talk about how I took out a student loan when I moved back to Nebraska to buy a Harley.
We all make mistakes. We all dig ourselves into holes that seem impossible to get out of. IT’S NOT IMPOSSIBLE! And that’s what we’re going to talk about today.
How to Take Control of Your Finances:
Take your relationship with money to counseling.
Ok, stick with me here. I’m not talking about a real counselor. (But if you think that that is the only way to get your finances in order, a money counselor is never a bad idea.) I am talking about taking an afternoon and sitting down with your money relationship.
When you think about money what are your thoughts? Your true thoughts. Is your internal conversation something like:
I wish I had that much money.
I’ll never be able to make that much money.
I wish I could afford xyz.
They’re so much richer than me.
If this is how you talk to yourself then this is how your brain sees money. Money is always going to seem out of reach if you’ve been training your brain to make it out of reach. Something that I like to remind myself when I get discouraged is: There is enough to go around. There’s not a set amount of money in this world for each person. You can have more and you should have more, if that is what you want.
You’re worth it. You’re worth all of the money that you want to have. You’re worth double the money that you want to have. Change the way you talk to yourself. Instead of saying “I wish” say “I have”. I have money. I can afford that.
Take the time, sit down with your finances and discover your true money relationship. The whole idea is to reframe how you talk to yourself about money.
*Side note: Think about the conversations you’re having with your children about money. Are you constantly telling them that “we can’t afford that”? Positive money conversations start during childhood. This is just food for thought for any parents.
Evaluate your income.
I am always researching ways to increase my income. After I get done working, every day, I sit down with my business plan and research ways to increase what I’m doing.
If you work at a traditional job, evaluate the last time that you got a raise. Maybe it’s time to ask for one. Traditionally, you should be getting a 3-5% raise every year just because of inflation. But you should also be getting a raise on top of that for your hard work. Evaluate your benefits. Evaluate your vacation and sick leave. Evaluate the time that you have outside of your traditional job. Can you work another job to reach a financial goal?
If increasing your income is important, take the time to research what you can do to reach your financial goals.
Cut the fluff.
Write down every single one of your bills, debts, credit cards, payments, etc. Whatever it is that needs to be paid every month, right it down. Now start cutting the fluff off.
Maybe it’s time to cancel the gym membership that you use 3 times a month. Maybe it’s time to cut the cord. Maybe it’s time to start reading by candlelight instead of turning on the light! Ha.. maybe I’m kidding about the last one. Maybe.
But really, when I moved my business online and out of a brick and mortar store, I was able to cut expenses by 80%. When I moved in with Michael, we cut the Dish bill by 70%. (I wanted to get rid of it altogether but compromise.) Find the items on your list that are not necessities. Unless they bring you immense joy, cut it.
Pay yourself first.
This is one that I still struggle with. Honestly, I’ve gotten myself into some predicaments because I don’t have a substantial savings. So take it from me, and every other person that talks about money, PAY YOURSELF FIRST.
20% of your monthly income should go directly into your savings. The best advice I’ve ever received for this is to automate it. Have it taken out of your paycheck immediately so you never even miss it.
This goes back to knowing your worth. You are worth investing in yourself first. Put the 20% into savings. You’ll thank yourself later.
Don’t get discouraged.
After you’ve gone through all of these steps and you’re flying high on your financial bad-assness for a few months, you really think you’ve got this in the bag, BAM something happens. Whatever this something is, do not let it discourage you. Life is all about the journey. There will be ups and downs in your financial journey. But that’s part of the ride.
Embrace what happened and push forward. Two steps forward and one step back is still one step forward.
Talk about it.
I’d like to know when it was decided that money is a taboo topic. Has it always been this way? Well it’s not anymore. Money doesn’t define your worth. Money doesn’t make you better than someone or less than someone. Money is just money. So start talking about your financial struggles with the people that you trust.
For me, I trust all of you! I love to talk about money and I have learned so much from other people since I started talking about money. Michael and I talk about money almost every day. We bounce money ideas, questions, concerns off of each other all of the time. I talk about money with my sister almost just as much. I talk about money with you all on a regular basis too!
Money can cause a lot of anxiety and that is the reason I started talking about it in the first place. Whenever I feel anxious, I have to start talking about it until I feel better. (Side note: that is how I handle anxiety.) I promise you that there is someone out there that is going through what you are. Or has gone through it before and can give you tips on how to remedy the situation.
Talk about money. Ask questions. Be curious!
I’m going to wrap this up with a money insight that I have never forgotten: Do not look at your bank account before you go to bed. There’s nothing you can do about it at that time. Check your bank account in the morning when you’re fresh and can get things done.
What is the best financial advice you have ever received?