New Year, New Financial Behavior

It is a new year and we all are making new resolutions, commitments, and goals. When we think about wellness we usually only think about physical health. Wellness means more than simply physical health though.  Wellness is finding balance between your emotional, spiritual, physical and financial self.

I often meet with clients about finances and they end up crying, needing tissue and a hug.  I often greet financial coaching clients by saying come sit in my chair (I don’t have a couch in my office). Financial discussions are often times emotionally charged. Dealing with finances can be stressful. Dealing with finances can cause arguments, divorce and sometimes even suicide.

Why is it so hard for people to get control of their finances? Overspending is usually an indication that something else is wrong. Just like there is emotional eating there is emotional shopping! I used to be one of them. The only saving grace for me was that I had sufficient income to do it and I purchased inexpensive items. I would spend because I was happy, spend because I was sad, spend because I had a good day, and spend because my day was bad. I started realizing I didn’t NEED anything. Once I decided to only spend on my needs and not my wants, regardless of my feelings, my financial situation changed!

If you want to experience change with your finances in 2016 try following these steps

  1. Create a budget.

This is one of the hardest parts of the process. Why? Because it means assessing where you true financial condition. It means looking at the bottom line. Most find that after paying bills on time there is little to no discretionary funds and/or there is a negative balance for the month.

 

  1. Regularly refer to your budget.

You should be referring to the budget you created on a weekly basis (at a minimum). If changes need to be made you should figure out how to adjust the budget to prevent a negative balance and update the budget immediately.

 

  1. Eliminate unhealthy financial behaviors.

Financial advice is worthless if you don’t change your negative behaviors. Finances is 20% numbers and 80% behaviors. This hasn’t been scientifically tested but it’s the “M.N.D. Theory”. How can someone making $25,000 have $12,000 saved and someone making $100,000 have $500 saved? The numbers don’t make sense. Why? Because of behaviors. The person making $25,000 decided to save their discretionary funds every month for two years. The person making $100,000 spent all of their discretionary funds every month for two years.

I always hear my clients say that their financial conditions would be better “if only they made more money”.  Please stop saying that or listening to people say that. If you are not a good steward over what you have how can you possibly expect to be blessed with more? Learn how to make what you have work. It starts with a budget.

 

  1. Find support groups.

There are plenty of free and low cost groups you can join to help become financially fit. Google “The Budgetnista” and The Finance Bar (Marsha Horton Barnes) both offer great financial programs. Why go through this journey alone when you can have others cheering you on, keeping you on track, and giving you advice and ideas on how to get financially fit?

 

  1. Get a financial advisor and/or a therapist. 

If it seems impossible to tackle your declining financial situation on your own you can always hire a financial advisor; someone you trust who can help you figure out a strategy to tackle debt, create a budget and hold you accountable to your financial plan and goals. I often receive questions about being able to afford a financial advisor if there isn’t enough money to pay the bills. My response is usually that if there is enough money to do the things you WANT to do you can figure out a way to do the things you NEED to do. I can usually find $100 a month in a client’s budget in 2 minutes; it is usually in the daily coffee or eating out line items of the budget.

I have also started referring clients to licensed therapists. Some issues of overspending stems from deep rooted emotional issues. Insurance companies recognize the need for good mental health. Most companies provide a certain number of free sessions per year or low co-pays. There is such a stigma associated with seeing a therapist. I am not sure why, however, I do know from experience that it can be life changing! Once you deal with the emotional issues you can not only get financially fit but you will stay financially fit.

It is great to make declarations to change and become a NEW person in the NEW Year. It is even better to take actions to make these changes. Be genuinely committed to change and get financially fit in 2016.

 

Remember…..if nothing changes……..nothing changes!

M.N.D.

Be sure to follow..

Mary Nicole Douglas

Owner, M.N.D. Accounting

M.N.D. Accounting.com

http://mndaccounting.blogspot.com/