There's many ways to win with money but there are also some ways that you are setting yourself up to fail financially. These three main ideas are listed below. If you need help getting a plan in place to win with your money, please schedule a free consultation to see if money coaching would help you!
Not having a plan! According to Benjamin Franklin, "If you fail to plan, you are planning to fail." Do you sit down each month and lay out a plan to win with your money? Do you have a budget in place so you understand how much money you have coming in each month and how much is going out? Many people do not like the thought of a budget because it seems restrictive, but it really does set you up to win!
You get to decide what your money plan looks like. You can decide how much to spend on fun things like shopping for clothes or new guns and tactical gear. You are the one making the calls here. A money plan allows you to set your goals and stay on track with those goals.
You don't have an emergency fund. We all know hard times will come, your car will break down or your A/C unit will finally quit. But unfortunately less than half of Americans can even cover a $1,000 financial emergency. If we know tough times are coming, why don't we prepare for them so that we don't have to add financial stress to the already difficult situation? I recommend at least 4-6 months of your income sitting in a high yield savings account for your emergency fund.
For example: My car broke down multiple times the past month. My car is very old and we knew that sooner of later something would break. Before we had an emergency fund, car repairs would result in stress, arguments with my spouse because of the stress and adding more debt to the credit cards. But since we had 4 months of income sitting in a savings account, we were able to pay for the car repairs and it didn't cause major stress in our lives. Yes, it was still a bummer to pay for car repairs, but THIS TIME we didn't have to go into debt over it.
You don't have clear goals! It's so easy to make some general plans that we never stick to. Think about all the New Years resolutions you didn't keep. You didn't stick to them, because you didn't have a clear enough picture of what you wanted to achieve.
Example: I want to pay off my car. This is the start of a goal but it is lacking some guiding principles.
First you need to be specific about your goal - My car loan is $20,000.
Next determine the timeline - I want to pay my car off in 10 months. Now we know our timeline and that you need to pay $2,000 a month in order to pay off the car in 10 months.
Ensure your goals are realistic - Can I actually give $2,000 extra towards my car payment each month? How am I going to do this? Will I find the money from my budget? Work overtime to reach this goal? Is that amount of overtime realistic for my lifestyle?
Get accountability - A spouse, friend, financial coach, someone who will check in with you on your goals every month to encourage you and remind you to stick to the plan. We all need accountability. People hire personal trainers, not because they can't look up a workout video on youtube for free, but because they know that the accountability that they paid their trainer for, helps them to show up and put in the hard work to achieve their goals.
Need help with your money? Sign up for a free consultation to see if money coaching could be the tool to help you win!