Posts tagged budget
This is the 3rd in a series on creating a financially healthy life. If you jumped in and did the first two steps, Just Do It and Reality, Get a Dose, this one might be the one you might need extra support in accomplishing. Lots of us like to do projects. We like to plan. The first two steps were projects.
This 3rd step requires consistency. Yes, consistency. This is where many of us jump off the financial band wagon.
I liken it to the health band wagon. Most people can stick to a diet for awhile. It might be challenging, you may not like it, but if we knew that we only had to change our eating habits for 3 months to impact our physical health for the rest of our lives, would we do it? Most of us would.
If I told you that getting into financial action for 3 months, really making a consistent commitment, would change your financial life for the years to come, would you do it? You’d have better results if you agreed to do it for a year, for 5 years, or for the rest of your life. But tracking your numbers for just 3 months will make an impact as well. It will reset your clock, equilibrate the way you look at your spending, and serve you in truly seeing your income versus your spending. More >
In the first of this series on financial well being and health, Just Do It, we walked through the steps of a Fully Fit Plan. I encourage people to take a look at where they want to be before they look at where they are.
It’s the same philosophy as Jim Rohn’s excellent quote “You are the average of the five people you spend the most time with.” If you’re hanging out only with your current spending plan, only looking at your current reality, energetically you’re creating the same plan for yourself, repeatedly.
If every month you first look at your Fully Fit Plan, it will remind you where you’re headed, where your intentions and dreams are. Simply writing the Plan out declares to the universe, and to your subconscious, that you are on a path.
It also prepares you for a dose of reality: your current spending plan. Now it’s time to look, see and tell the truth.
It’s true that not everyone reading this sees their current spending plan as dismal, tight, something to move beyond. But I’m thinking many of you do. If you’re current spending plan had an extra $1,000 a month in it, you probably wouldn’t be reading my blog, you’d be at Intelligent Investing reading Chris Barth. More >
The secret to financial well being and health is: be in consistent action. Or as Nike so powerfully declares: Just Do It!
That’s the key that separates the successful from the unsuccessful in improving financial health. Those that spend consistent time every month working on their finances build their financial muscle and create a financially healthier life. Those that consistently put a little bit of money away every month, even just a few dollars, create a financially healthier life. Those that learn a little something new, consistently, create a financially healthier life. There is no better, faster, more effective approach to financial health than simply being in action.
One frequent mistake I see, and I’ve made it myself, is that we only take action when money is tight, when something’s wrong. It’s kind of like only going to the gym when you’re overweight and out of shape. You’re spending time just trying to get back to some baseline of health. You never get the opportunity to fine tune your health and strength.
Winter is a time of reflection, both personally and for our businesses. How did this past year go? Did I meet my goals? Um, did I have goals? What do I want next year to look like? What do I have to do to get there?
At Creating Answers, it is the time of year we are busy working with all of our clients on 2011 goals and budgets. It is one of my favorite times of the year because you get to do two really fun things: analyze how last year went, and draw the financial road map to follow next year. It’s financial art at its most fun.
If you think of this work as a chore, I invite you to reframe your beliefs about planning and numbers. I invite you to think of it as a game, or a puzzle. Make it a date with yourself. Go to your favorite coffee house, or pour yourself a bottle of fine wine. And then…start asking yourself questions.
What percentage of your total income goal did you reach this year? 120%? Great! 85%? Not so great. What do you need to do differently in 2011? What amount of marketing dollars would have closed that 15% gap? Do you need to increase your networking time? Upsell existing clients? Raise your prices?
“If you think of this work as a chore, I invite you to reframe your beliefs about planning and numbers.”
Take a look at your discretionary areas of spending? How much did you spend on marketing and advertising? What were the financial results? Professional development? Results? Equipment? Results?
How much did you spend on staffing and/or outside consultants? Did they work at capacity? Did you generate revenue from your staff? How much? A great rule of thumb to start with is three times their cost.
While it is difficult to assign numbers to each of those questions, the exercise of trying will create answers. What if you spent nothing in each of those areas? What if you spent three times as much?
Most importantly, don’t overdo the process. It’s more effective to do a really thorough look at your 15 most critical spending areas consistently than it is to look at all 60 of the expense accounts you have in Quickbooks. (And if you have 60 expense accounts in Quickbooks, you should give us a call!)
Find out more about what we do at http://CreatingAnswers.com.
Here’s to a prosperous new year full of financial clarity!
Want financial clarity for the holidays?
Entertaining, stocking stuffers, extra travel expenses, cookies for the neighbors, decorations, office holiday party gifts, holiday grocery shopping and of course, presents… these are just a smattering of expenses that are about to edge their way into your spending plan over the next several weeks.
Whether you’ve been saving all year, plan to squeeze it into your regular monthly spending, plan to not partake in any of it, or have a credit card you use for the holidays, now is a good time to make a plan. Even if you don’t stick to your plan completely, just spending the time to fill out this handy holiday plan will provide you a road map for the trip you are about to take.
What are your priorities? What are your limits? What are your expectations? How do you feel about the money you’ve spent during past holidays? What could you do differently? And a favorite question from our Financial Boot Camps, what would your hero do?
Print the “Manage Your Holiday Spending” guide from the AFSA Education Foundation. Take a walk, think it over, journal the above questions if you’d like, then get a pencil and a calculator and make your plan!
And… enjoy the season.