Today I want to focus on helping those of you who may be feeling a little stuck. Those of you who may have followed the podcast series and still be wondering; how do I get started?
I am a massive believer in getting your behaviours and habits right first before you get started. Why? Because the fastest way to build wealth is to adjust your spending habits so that you can save more, be conscious about your spending habits and be proactive rather than reactive.
Identifying your relationship with money
You may think that because I am the ‘money expert’ that I am great with numbers, love spreadsheets, technical jargon and am naturally good at making financial decisions. Quite the opposite. I hate spreadsheets!
Some of my very earliest memories had a huge influence on my life and particularly how I dealt with money. I lived through my teenage years dealing with eating disorders. This caused me to have a very poor relationship with my purse strings as I spent money to make myself feel better.
I would spend all of my wages on clothes; hundreds of pounds every month. In an attempt to have control over my poor body confidence, ironically I had no control over my money.
How many of you have suffered with your mental health? How many of you have found that trauma has changed the way you manage your money, or don’t manage your money at all?
We need to recognise that our emotions have an impact on our decisions.
We are driven by our thoughts, that drive our emotions, that drive the decisions we make. We talked a little more about this in last weeks episode. So go back and have listen to this.
The challenge I had was with having a spontaneous, impulsive relationship with money and this is very common. I see this every single day with the women that I coach. Compulsive behaviour is often associated with mental health illnesses such as depression or anxiety and money can be hugely influential.
For many, they may have an impulsive relationship with food or alcohol for example, which can cause financial difficulties. For me, it was clothes. Money is still such a taboo subject, which doesn’t help the situation, this can lead people to continue to bury their head in the sand. Negative emotions then lead them to stay stuck in the cycle of impulsive spending.
But. one. goal. at. a. time.
“Goals in writing are dreams in deadlines”. – Napoleon Hill
The 6 fastest ways to build wealth
The fastest ways to build wealth, to move one step forward, (because that is always the direction we want to be heading) are;
- Don’t focus on instant gratification – Often, we are too focused on buying things for instant pleasure. Instead, think about your spending as ‘current spending’ versus ‘future spending’. The more you save now, the more you can spend later.
A great exercise around this is to write a physical list of the things that are important to you in life, and the things that you are grateful for in life that you already have.
I also talk a lot with my children about the difference between wants and needs, which is another great exercise. We flip a magic chart up on the wall, and we separate the things that we want to buy into ‘wants’ and ‘needs’. This is a really fantastic way to rationalise your purchases before you make them.
- Be intentional with money – Know what you want, and measure what is important to you. Understand what you’re saving and investing for before you even think about starting.
BUT – one. goal. at. a. time!
- Focus on who is in your boat – The reality is that we can’t possibly know everything, or be experienced in everything, so we need the people on the boat with us.
This could be financially experienced people like coaches and advisers or my money circle membership, but also includes things like mental, physical, and health support, and a whole host of other things.
- Don’t make big financial decisions during the week – The working week is often the wrong time to make big financial considerations. Instead, wait until you are calm, unemotional and in a state to make an informed decision.
This also allows you to have some reflective time to have conversations with a partner perhaps and to assess your financial state before making the decision.
For us women, this also includes being mindful of things like your monthly cycle. If you don’t feel as though you’re in an emotional place to make balanced decisions, then don’t make decisions at those times.
- Don’t compare yourself to others – Comparititis is the demon of all things!
Don’t compare yourself to others, compare yourself to the person you were yesterday.
- Get financially naked – Not literally!
Get really clear on your income and outgoings. If you can begin to plug some of your money leaks, that’s money that could be serving a purpose elsewhere, whether it’s saving or investing, or something else.
Don’t compare yourself to others, compare yourself to the person you were yesterday.Jordan Peterson
What works for you?
This doesn’t mean you have to reach for a spreadsheet! Get clear on your income and your outgoings. Understand where you spend money and where your weaknesses are. Food is a common area of overspend. If you know that is the case, food plan and consider using the Dave Ramsey envelope system. Withdraw a fixed amount of cash, put it into an envelope and take that with you when you shop. Once the money has gone, it’s gone!
Give every single pound you earn a job. Whether that’s allocating it to bills or to a clothes fund, allocating and planning your earnings personalises money and gives it emotion and purpose. Give yourself some ‘play money’ but make sure that it is affordable for you.
Family, intimacy, and friendship are less about money and more about time. While you need a certain amount of money for this, spending quality time together over a board game or a nice picnic in the park doesn’t have to involve a high price tag.
Book in a complimentary call to discuss how financial coaching can help you move from financial overwhelm to confidence and control.