Getting a Handle on Money

Today we’re talking about Money--a BIG topic that I’d like to keep simple. I believe it is critical to get a “handle” on our money issues if we are to truly live the life we imagine (in every area). Money is a powerful resource available to us. Happiness and well being hinge in large part on your relationship with money.

So, how does money, and the way you handle/approach it, allow (or limit) you to be WHO you want to be and achieve WHAT you want to achieve?

Achieving big dreams require resources and money can be a powerful resource (we’ve already talked about the power of Time, Energy and Attitude in previous articles). Money relationships do not have to be frustrating and limiting. They can be freeing and powerful.

I want you to imagine a constructive and productive relationship with money so that it is a resource that furthers you, rather than a frustration that limits you.

First things first. You just gotta KNOW. Financial freedom is a conscious state of living—no more mindless spending!

You must know three things:
1. What you have
2. Where you have it
3. Where it goes

Sit down and figure out exactly what income and assets you have and where you have them. Then identify all of your liabilities and expenses. Where is the money going each month?

Until you know, you won’t be able to act in choice. This gets to the issue of “WHO you want to be around money”. Do you want to be someone in control? Or do you want to be someone who AVOIDS money issues?

Create a budget

Once you know what’s currently going on, you can then set up your plan for what will go on from this day forward. This will be your budget.

I challenge you to write your budget differently than most financial plans will. I want for you to have a VALUES CENTERED plan that allows you achieve what you want to accomplish, regardless of your income.

1. First, list those things in life you MOST VALUE. (things that lead to fulfillment)
2. Then list the things you NEED to be at your best (that bring satisfaction).
3. Then list the things you WANT (that bring gratification).

Put a plan together that support you in directing your money where your VALUES are first. Then put money toward your needs and priorities. Finally, you can fund the “wants”. Many people do it backwards…wants first, then needs, then values --which usually leads to feeling dissatisfied and unfulfilled because there isn’t enough money left to put things away for what you most value. And that creates inner conflict—and drives up the spending on wants (which never solves the conflict).

For example, if you value creativity, your financial plan should put a percentage of your income into ways for you to express creativity. If it’s adventure, are you saving for special trips and adventures? If you value learning, are you budgeting for more opportunities to grow and learn or are you saving for your children’s learning? If you value security are you saving for your future retirement and emergencies? I’m not saying go wild here. But if you put just 5-10% of your income toward your top few values you will notice a much deeper level of fulfillment in your life.

If you find a shortfall between your income and your spending, what can you do?
Well, it’s a basic math issue—in order to achieve your financial goals you have to make more than you spend (or spend less than you make!). Your three options are:

1. Figure out ways you can spend less
2. Find ways to make more
3. Do both

Ideas into Action

It’s time to get started with your spending and savings plan!

1. Set aside a significant chunk of time to take a complete inventory of everything you make, have, and spend. (There is a complimentary Excel spreadsheet included with the workbook to help you get started here).

2. List out your Values, Needs, and Wants and assess them against how you currently spend your money. Does your money first go to pay for the things you most value? Or do you first pay for the ‘wants’ and ‘needs’ and use what’s left to finance the values? How would your spending be different if you paid for your values first?

3. Brainstorm 12 ways you could cut spending immediately in order to achieve your financial goals.

4. Brainstorm 12 ways you could make more money to help achieve your goals.