Managing Money Well Creates Choices

Managing money well gives you more choices and options. You see, money is just a tool to help you reach your goals and dreams. It’s an asset and a help. It’s not a master, and it’s a terrible god.  

William Jennings Bryan, three-time Presidential candidate, put it this way in a speech in 1900, “There is a proper relation which should exist between man and money. Man, the handiwork of God, comes first: money, the handiwork of man, is of inferior importance.”

Our purpose is not to serve money, but for money to serve us and help us reach aspirations.

When money is managed well, good financial decisions are made and financial goals and dreams are moving forward. Some questions for you to consider are:

What are your goals for your money? When you make financial decisions, do you know the choices that you have? When you make financial decisions, do you make them based on your goals and dreams and do they support the financial life you want to create? Do you make financial decisions based on how they grow your assets?

These questions can guide you as you make financial decision and improve choices.

Assets Are Money Managed Well

The foundation of choices with money are assets and specifically, liquid assets.  Asset that can easily be converted into cash in a short amount of time are called. Liquid assets include things like cash, money market instruments, and marketable securities.

Liquid assets are often viewed as cash, and likewise may be called cash equivalents because the owner is confident the assets can easily be exchanged for cash at any time.

Overall, liquid assets are very important for individuals because they are the first source of cash used in meeting payment obligations, financial shocks, emergencies, and the other things that we all do with money. Managing money well creates assets and provides the choice to go back to school or to quit your current job to look for a better one or start your own business.

David Kolb, An educator, says this about choices, “The way we process the possibilities of each new emerging event determines the range of choices and decisions we see. The choices and decisions we make to some extent determine the events we live through, and these events influence our future choices. Thus, we create ourselves through the choice of actual occasions we live through, and these events influence our future choices.” (Kolb 1984:63-64).

You can create better choices for you and your family!

Can A Financial Coach Help you Manage Money Well? 

I am a financial coach/counselor and what I do is help people navigate financial choices to help them manage money better. I would love to help you manage your finances better.  Imagine, a year from now and you have a different outlook on life and different perspective about your future. Working with you as your financial coach, we can make this happen. 

The question is not can a financial coach help you, because they can, the question is, are you ready to be coached? Are you open to receive coaching so that you can make better financial decisions?  Contact me if I can help you. Take care.

Using Values to Guide Money Management

Today I want to talk a little about using values to guide money management. Values are personal beliefs about what you regard as worthy and true. They tend to reflect your upbringing, and they tend to change very little without conscious effort. Values are the worth of something in terms of the amount for which something can be exchanged. People do what they value.  

Your goals should be based on your values. The more harmonious your values are to your goals with money, the greater the likelihood of attaining them. 

To understand better how you value money, answer this question. If you had an extra $1000, what would you do with it?  Seriously think about this. There are a lot of things you could do, but you decided based on your values. 

Understanding Values

Whatever you decide, it’s your decision, and it’s not about right or wrong.  It’s about your values and your awareness. Understanding your values will help you be a better steward and create a better spending plan.  Remember, people do what they value.

One of the things I ask clients to do is to think about and understand what they value. Because people do what they value, knowing and understanding your core values can help you in all that you do, especially in managing your money.    

Once you a better understanding of your values, you can consciously connect your spending and your spending plan to your values.  And you can create a spending plan that works for you and is easier to stick to. 

Additionally, by understanding your values, you can make goals for your money and your finances that reflect your values, and therefore you have a better chance of reaching your goals and the goals are better. Because your goals reflect your values.  So, instead of buying a big-screen TV with a credit card, maybe you make a goal to save money and buy it with cash because you value the freedom of not paying the interest you will be putting on your credit card. Now you are using values to guide money management. 

Determining Your Core Values

So how do you determine what your values are? Below is a listing of values that can get you started to help you determine your values. 

Ambitious, Caring, Charity, Curious, Dependable, Enthusiastic, Ethical,Flexible, Freedom, Generous, Growth, Happiness, Health, Innovation, Intelligence, Loving, Loyal, Optimistic, Personal development, Popularity,Professionalism, Punctuality, Quality, Recognition, Relationships, Reliability,Safety, Security, Service, Spirituality, Stability, Thankfulness, Traditionalism, Understanding, Wealth, Well-being, Wisdom

If I asked you what you valued, what would you say?

  1. Write down the values that resonate with you.  Add any you think of that are not on the list.
  2. Select the values that you think most accurately describes you and then categorize values into related groups
  3. Once you have related groups of values, identify a central theme of the group.
  4. Next, determine your top core values by ranking your central themes in order of importance.  If you must narrow your list to under 6 to core values.

Values are unique and influenced by upbringing and experiences.

Keep in mind that it’s important to stay conscious of your values throughout your life because, like spending plans, they can change as your career and personal life develops.

Thanks for reading and sharing with others who may benefit. Take care.

To Do Better with Money Track Your Spending 

If you are not tracking your income and expenses, you can’t manage your money effectively. To do better with money track your spending.   

Tracking your spending, on the surface, appears to be straightforward and simple, but it can be a complex process and quite difficult. 

It takes consistency to track your spending which is the hard part.  And tracking your spending can be overwhelming.   

To deal with this difficulty I tell clients to get into the habit of consistently recording your expenses. Use can use any type of log or spreadsheet, even your phone, to record expenses.

Whatever you use as your log, even if it’s a piece of paper, every time you receive money, you should record it in your log. 

Whether it’s from a paycheck or gambling winnings, record it in the log. And every time you spend money, whether it is a bill or that cup of morning coffee, record it

Track Your Spending Every time, every time, every time!

Tracking your spending makes your spending more real. You will begin to see it. You will see it come in and go out and begin to see it as a tool to help you reach financial goals.

It will give you a sense of control.  

Your awareness of your money and your behavior with money will sharpen, allowing you to make changes which will improve your financial situation. 

This is an important money skill. 

Here are a few tips to help you in tracking your spending:

  • Make it a routine.  Once you get into the habit of tracking your spending, I promise, it will get easier. Always, do what works for you. No one system or way is perfect for everybody. The important thing is to track your spending. How you do is up to you!
  • Be more careful with transactions that are easily forgotten. Some transactions, online transactions, transactions without a receipt, can be quickly forgotten. Take special steps to remember these. 
  • Get a receipt for everything. There are not too many places where you can spend money and not get a receipt. If they do not give you one, ask for one. Additionally, make it a habit of putting all your receipts in one place so that you do not forget where they are.
  • It is best to record your transactions daily. Although you can track expenses once a week, you may find this hard to do. By tracking expenses daily, you do not run into the problems that you would by tracking them weekly such as I can’t remember a transaction or can’t find a receipt, etc.

Recording expenses will make you more connected to what you spend

It will make you think more about each purchase, and you will begin to see if your purchases line up with your values.  This may help you to keep unnecessary spending under control.   

Tracking your spending is a rewarding process. 

It will paint a picture of your spending habits as they exist and not as you think they exist.  You can then use this information to create a spending plan, or, at the least, to serve as a picture of where your money actually goes.

How do you track your spending?  Share your thoughts and subscribe to the GoldenRules Blog and learn how to create a winning spending plan for you and your family. 

Don’t Resist the Change

Research has shown that when people are trying to change destructive or negative behaviors, only 20 percent of us are in a ready or action phase to change this behavior. The other 80 percent are really not interested in changing at all and are in fact various stages of ambivalence toward the bad behavior.

We resist a lot of things.  We resist significant others, we resist those more knowledgeable, we resist authority, and we resist change.  Resistance is a part of life; it’s in our DNA and can be extremely dangerous.  Resistance is an automatic response to feeling coaxed or to misunderstanding.  It is, misunderstanding or lack of clear, effective communication that, in my opinion, started every conflict that has ever been.  And so, it goes with managing our finances as well.   

Research has shown that when people are trying to change destructive or negative behaviors, only 20 percent of us are in a ready or action phase to change this behavior. 

The other 80 percent are really not interested in changing at all and are in fact various stages of ambivalence toward the bad behavior.

One of my favorite quotes from Mahatma Gandhi is, “You must be the change you want to see in the world.”

I like it because it can be used and adapted to many situations and circumstances.  If you want to make a change in your financial life, you must change your financial behavior or how you handle money.  And to do that, you need to think differently. 

The following tips will help you realize the change you want to see in your finances and help you improve your financial behavior.  

See that Change is Needed

You are the one, you are the person that will need to make the decision to change.  No one can make that decision for you.   And to make a change you must first see a need for change.  Until you see a real tangible need for change or realize the need for change, no change will take place. 

You may not see a pressing need for change at the current time but maybe a family member or friend does. 

Ask them if they feel like a certain spending pattern needs to adjust. 

If enough family or friends think that you overspend when you go shopping, you probably do and a change in your spending habits is needed.   Doing this, can help you see behavior that you may not see, or not see as such a problem.  

Develop and Implement Plan of Action

Once you decide to change you need a plan to make the adjustments needed.  Your plan should map out steps that you will take to change and possible barriers to finishing the plan. 

Additionally, you need to develop strategies for combating the barriers to plan completion.  For example, maybe you have a problem when you go shopping that you spend more than you should.   This could be a barrier to your plan for changing your overspending habits not coming to completion.  Therefore, to combat this barrier, you set a spending limit and take that amount of money with you when you go shopping so that you will not go over the limit. 

Maybe you make a list beforehand and take it with you as a tool to combat overspending. 

Review and Revise Plan

Plans are just that, plans, and almost meant for change.  Review your plans periodically to see if you are working with your plan and it is working with you.  If your plan seems to be working…great!  No need for adjustments, keep doing what you are doing. 

However, if the plan does not seem to be working, it’s time to make a change.  Try going back to the problem that caused you to change in the first place. 

Are you seeing the problem correctly? 

Next, revise the plan based on how you see the change that is needed now. 

You can change destructive or bad behaviors.  You must want to change the behavior first.  Then develop a plan and review the plan every week or so.  Revise the plan when it is not working for you.  

Four Strategies to Help You Start Saving

Pay off high-cost debt.  The best investment most borrowers can make is to pay off consumer debt with double-digit interest rates.  For example, if you have a $3,000 credit card balance at 19.8 percent, and you only pay the required minimum payment of 2 percent of the balance or $15 whichever is greater, it will take 39 years to pay off the loan. 

The personal saving rate in America in June of 2021 was 9.4%, which is a good rate of saving.  However, some families are not saving adequately for retirement, and lower-income households do not have adequate emergency savings for unexpected expenditures such as car repairs or medical bills. 

Saving must become a Priority

The mindset of saving needs to change.  Saving is an important part of financial security and a spending plan or budget can help you save. 

This can be done by setting saving goals and then developing a plan to meet the goal. 

Here are four saving strategies that may help get you started in the right direction:

  1. Pay off high-cost debt.  The best investment most borrowers can make is to pay off consumer debt with double-digit interest rates.  For example, if you have a $3,000 credit card balance at 19.8 percent, and you only pay the required minimum payment of 2 percent of the balance or $15 whichever is greater, it will take 39 years to pay off the loan. 

With accumulating interest, you will pay more than $10,000 in interest charges.

  • Buy a home and pay off the mortgage before you retire.  The largest asset of most middle-income families is their home equity.  Once these families have made their last mortgage payment, they have far lower housing expenses.  They also have an asset that can be borrowed against in emergencies or converted into cash through the sale of the home.
  • Participate in a work-related retirement program.  If you participate in a work-related retirement program such as a 401k plan, with a dollar-for-dollar match, you will likely receive an annual yield of greater than 100 percent of your investment.  You save $100 and get $200 or more with the employer match.
  • Outside of work, save monthly through an automatic transfer from checking to savings.  These savings will provide funds for emergencies, home purchases, school tuition, or even retirement.  What you don’t see, you will probably not miss.

Once you realize that you need to save, develop a saving goal.  Then develop a plan to meet the goal. 

If you do not have an emergency fund, that should be your first goal.  Build up a $1000 emergency fund. 

By using the strategies above, you could, in no time, be on your way to meeting your goal and improving your financial situation.