Start Building a Strong Money Mindset
When I tell people I am a Financial Coach, I sometimes see fear come across their faces. Almost as if they don’t want to expose their weakness in this area. However, I want to bring the conversation of being financially fit into the spotlight. There is no shame in being in a financially disappointing situation. The only shame is not doing something about it! Accepting where you are and where you need to be is strength, not weakness. And from this place of acceptance that you can truly start to redesign a life in line with what makes you happy.
My goal as a financial coach is not to simply set you up with a budget, but rather help you form a new money mindset. Your current money mindset may be driving you to spend in areas that are not really aligned with what makes you happy. By taking apart your current thoughts about income, savings, and spending we can help build a healthy money mindset that focuses on creating a financially secure life. From this solid base you can build a life truly fulfilling.
I was listening to a video on YouTube by Brian Trautman of SV Delos on how he thought he was following his dream; graduating from UW in engineering and starting a fantastic career at Microsoft. Then one day, on his long commutes to and from work, he realized that the best part of his day was the silence he enjoyed while in the car over a bridge. He decided that this was not the life he wanted and started a new life path sailing around the world.
While sailing around the world may not be your thing, it is certainly not mine, but it did make me think that this is exactly why I am a financial coach; to help someone set up their financial base to, in lack of better words, sail into the sunset.
3 Tips to build a health money mindset:
Set up a Solid Budget: Use a free interactive budget tool like Mint.com. I am such a strong believer in tracking your spending and savings in real time. This tool will keep up with your active spending and alert you of budget pitfalls. While Mint is great at tracking your spending, it is also great for tracking your savings. Try to reach at least 15% savings rate or more. But 15% is just a minimum. For the last 10 years of my life when I had a W2 job, I had a savings rate of 85%. Track your early retirement based on your savings here!
How To Buy and When: Set up a personal buying plan for anything over $100 dollars. Yes, do this even if you can "easily" buy anything over $100. Here are the two main steps in my buying plan.
Set up a savings plan of 2 weeks or longer to avoid impulse buys and allow yourself to feel the impact of the cost of this item.
Be very clear about how this new device will impact your life. How will it improve my happiness? How will it fill a void that is causing me unhappiness? Will this item fill a void or is the act of simply buying it provide the feeling of power and it is this power that I desire? Dig deep on how this item will impact your life.
Oh Shit Fund: Set up an emergency fund of 3 months (6 months if you can) even if you have debt. How much should your fund be? To answer these questions take a look at your budget (which tracks your spending) for the past 6 months and take an average number. Your fund should cover Core expenses (including the entire annual amount for property tax if you own your home) and around 50% of your discretionary expenses.
Book Club: Enough is Enough: Building a Sustainable Economy is a World of Finite Resources. Being kinder to the environment will also bring a positive impact to your wallet. Reuse items and avoid simply throwing away and rebuying. Buy used when you can: Craigs List, Goodwill, Ebay.
