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5 Tips for Building Your Best Financial Life in 2020

| January 02, 2020
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Hi Everyone! Welcome back to Melissa Making Cents!

Let’s face it, to most of us talking about money is not fun.  In my blog about “Changing your Money Mindset” and “Taking the time to have money conversations”, I spoke about the challenges and emotions that bubble up about money. I’ve spent a lot of time over the last couple months talking to friends and family about money.  This isn’t really normal for me. I’m fairly good at separating work and my personal life, but… I really did feel that these conversations were necessary. And guess what!  ..... No one flinched, or got uncomfortable!  

There are a couple of points that kept coming up.. These points are what I focus on with my financial planning and financial coaching clients.  They seem to be the easiest concepts to grasp, but they are sometimes the hardest to implement. Change is not something that happens overnight, and making a change to a financial habit is often even slower!



Know your own financial values

Money issues aren't just a matter of making the numbers line up. They expose real dilemmas in our lives, and unless we understand and resolve the dilemmas... it can be hard to build the financial life we want. 

So I will begin by saying it’s important to know your own financial values. Think of money as a form of energy that we direct toward the things that are important to us. Things like freedom, generosity, comfort, or taking care of others. When we are clear about what's important to us, we can align our financial goals with our values. 

How would your financial goals change if you are someone that values freedom?

If you are someone that values freedom, it could mean a couple different things. It might mean that it's important to you to be able to work in a career that you WANT and not feel tied to a job that drains your energy.  How do you get there? Well… It might mean going back to school to study something that makes you happy. Or it might mean stepping back from a high stress job to pursue happiness.

Case and point 5 years ago, I decided to sign up to do my first 70.3 triathlon race.  Knowing absolutely knowing about the sport… I emailed Coach Frank Cortese of Team Tri-Now to ask for help. (and by help I really mean a reality check because I would need more than a few months of hard work and prayers to get through this personal challenge…. anyhoo..).  As I began the training program, I really got to know Frank and his wife Debra. One day during a group training run, Debra and I got to talking and she told me the story of Tri-Now and their personal journeys.  Frank and Debra had very high stress jobs, but after a proverbial “Come to Jesus”, they both decided enough was enough. They wanted to be a part of something they loved, and thus Tri-Now was born. Debra told me that the decision was scary, and the journey was tough.  Starting and running your own business is no joke! The peace they found in making the leap of faith has paid off. The best part of starting the team are the members and people they get to meet along the way. (Ahem….Like me!)

Starting their own business may have meant they made other financial changes in their lives. But knowing how to prioritize your spending and save where you can goes a very long way! Frank and Debra both valued their freedom, and the return they have received in creating Tri-Now has literally been life changing!

(And yes… I did finish the race! And a few more since then!)

Valuing your freedom may also mean that you can take care of yourself.

Sometimes in a relationship, there is one partner that feels like they “rely” on the other.  Maybe it’s because they don’t understand finances, or maybe they don’t make a lot of money. Regardless…that person may feel like they are being taken care of and it might put a strain on the relationship. (With their partner, or even their relationship with themselves).  I see this often in abusive relationships, when a woman feels stuck and can’t get out of the relationship because she knows she can’t support herself. And.. it’s not just women, it happens with men as well. 

Women are naturally more conservative.  We feel better knowing there is money in the bank and that our needs are mostly met. To gain freedom in this sense, it might mean making more money, paying off debt, or even getting out of a bad personal situation.  There are lots of women like, Tana Greene, who take a leap of faith in themselves and end up starting mega companies down the road after leaving a bad situation. 

As cliche as it may sound, when thinking about your values make sure to put yourself at the top.  Sometimes you may not feel like much, but as a survivor of an abusive relationship, I can tell you that YOU ARE DEFINITELY WORTH IT. 

Know your personal truth and stop comparing yourself to others!

If you are trying to live up to someone else's expectations of what your financial life should be, you're in a tough place. It's critical to know your personal truth. If there is one gift I could give you right now it would be the gift of no longer feeling like you must “Keep Up with the Jones”. Trying to keep up with others is just plain exhausting! Keeping up with someone that has more money or different priorities will quickly pull you into dangerous financial territory.  We're each financially unique. 

I recently paid a visit to my new eye doctor. While I was waiting I overheard two women shopping for new glasses. “Patty” picked 3 pairs of glasses, without paying attention to the price.  “Jill” had 1 pair at first. Patty was trying to convince Jill that she needed 2 more pairs of glasses. The conversation went like this…..“They will go with your different outfits.” .. “But I can’t afford these expensive glasses”...”What if you get tired of wearing them, or they break”... “Well..maybe if I return some Christmas gifts for myself, and use part of my bonus coming in January, and split it between my 3 credit cards….”. 

I hate to say I wasn’t shocked. It’s actually pretty common to hear a conversation like this, when you are truly listening to people's needs versus wants.  I wanted to walk over to her and let her know that she was not bound by anything or anyone to purchase any of the glasses. This store seemed to only carry high dollar name brand glasses, which the salesperson justified by saying the last longer with higher quality hinges. Let me remind you that these high quality hinges don’t pay rent or other bills. I refuse to judge people based on their purchases, but the cheapest pair of glasses in the case was still over $200…. plus lenses.. which the salesman was also doing a great job at up selling.  As I finished up my eye exam and checked out… Jill was still trying to justify the cost.  

 It’s quite possible that two people can make the exact same income, yet be in completely different financial situations.  How many people graduate from college making really good money, but have $1,200 a month student loan payments? Don't be distracted by what other people are doing. It can be difficult to talk about, but knowing your personal truth about what you can and can't afford is the first step in setting up good boundaries.  

My Race, My Pace

My triathlon friends and I use the saying “My Race My Pace” when competing in various triathlons or running races.  It reminds us that although there are sometimes hundreds of others around us… Let’s not get caught up in the hype and try to go too fast, because you can suffer an injury or severe setback.  Real life is no different! So starting right now…. STOP COMPARING YOURSELF TO OTHERS!

 

Money management can be boring

While catching up at a holiday dinner, a friend asked me… What’s new… To which I always reply… Nothing.. my life is pretty boring… Which made us both laugh, and agree that boring is not always so bad! At least for us it's fine, because it means few surprises and no drama! Don’t get me wrong… There are a lot of moments in all of our lives where we want to be filled with passion and excitement. I just don’t want it to consume my life...or my bank account.

If I’ve said it before I’ll say it again... Money management is not sexy or exciting. When it comes to money, our emotions can be a major downfall.  Whether it's overconfidence that causes us to risk too much or anxiety that makes us try to avoid dealing with it altogether, it’s best to not let our emotions dictate our finances. It’s perfectly fine for your money management style and plan to be boring. In fact, it’s a really good goal to have!

Starting to save early allows you to be boring!

When you make the decision to put you and your finances first, you allow yourself a little more flexibility in the long run.  When you are in your 50s you are in your prime years of earning. Money is usually good, and you have more opportunities to save.  But waiting until then to get your finances in order will cost you, By starting to save early, you can make it a habit and you don’t have to scrimp and save later in life.  

Set aside a little time each week to learn about your money.  Set up a routine that's short and simple enough for you to stick to, even if it's just 15 minutes a week.  You don’t need to understand 100%, but you should know fundamentals so you can create a financial plan for your future… Or… Prevent yourself from being taken advantage of.

Let me also throw caution to the wind about being consumed with your money and watching it every minute of the day. The best example I have for you here is our good friend the bathroom scale.  You definitely don’t want to get on the scale ever minute of your life. (Especially during the holidays!) Relax a little… have a cookie, or eat the cake! Rewarding yourself for small victories is key! We don’t want to live too rigidly when it comes to our finances. It will more than likely backfire on you!

 

Your parents don't know everything

We get our money skills from our parents and role models.  This can either be good or bad, depending on your parent’s money habits. This is where having conversations about money comes in handy at an early age.  Often when people struggle with money, they wish that their parents had provided a better example or taken time to teach them better skills or habits. We tend to follow what we have learned from from example.  Regardless of your socioeconomic status… you CAN start to save and develop healthy financial habits. 

Sometimes it's not a matter of poor lessons but rather different life paths.  Parents might have provided the best instruction on how to manage a salary, but you want to be an entrepreneur.  You can finally admit that your parents don't know everything. We need to break free from our parents' example and any need for their approval. Your financial need is likely going to be different from mom and dad.  You will want different experiences out of life and it will take a different path to get there. This is also where I caution you about relying on your parent’s financial advisor’s advice. Is your investment plan based on your needs and goals? Or is the advisor lumping you in with your parents.

If you know your own values and know your own truth, it's easier to be clear about what you need to build the financial life you want and let go of the legacy that limits you.

Build your financial life now

Do you cringe every time you see a chart showing the time value of money? Yes.. Well ME TOO!  If you had started saving the day after you graduated college, you'd be on your way to being a millionaire. There's a great saying, "The best time to plant a tree is 20 years ago. The second best time is today."

We are in a judgment free zone.  For some people, it may have taken a decade to address your destructive financial habits. The past doesn't matter. The time to start is always now. There’s truly no time like the present. Educate yourself about financial literacy, and don’t feel bashful or ashamed to do so! I can promise you that you are definitely not alone. There is a huge percentage of our population that assumes that money is something they will never be able to understand.  

Need help? Contact a CERTIFIED FINANCIAL PLANNER™️, or Financial Coach to help get you started building your financial future.  Not sure exactly where to find one? Look no further! Fetterman Investments is here to help! Give us a call or schedule an appointment to start making positive financial changes for your family and the future!

Until next time... this is Melissa Making Cents!

Melissa Anne Cox

CERTIFIED FINANCIAL PLANNER™

College Funding and Student Loan Advisor

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