The Importance of Writing Down your Financial “What’s So”
Sometimes, it's easier to think all is well and to just keep working and paying off your debts, thinking that you are making progress. You might be making progress, but you might not. The only way to really know is to track your money regularly. One of the tools we are for here at Big Dream Coaching is a spending plan, a fundamental component of financial healing strategies. This plan involves setting up different accounts to save for the things that are priorities like necessities, giving and play, to name a few. Without clarity on what your money is doing, you are essentially navigating your financial journey half asleep, half awake.
To truly embrace financial empowerment coaching and to achieve the lifestyle of your dreams–your big dream–knowing exactly what comes in, what goes out, and when is critical. This knowledge will empower you take control, manage, and positively influence your financial situation. Once you know the numbers, then you can manage the numbers, and then you can move the numbers. Some ways to know your numbers are to make a spreadsheet of all of your expenditures each month and list them in a spreadsheet along with the dates they are taken out of your account or that you send in your payments. It's also beneficial to list the dates and amounts that you receive money - in terms of salary, commissions, cash. This way, you get an actual accounting of the flow of your money, a technique often overlooked in traditional money mindset coaching.
There was a time in my life where I would manage my finances something like this: boil water for spaghetti, put the spaghetti in the water, and then take a piece of pasta out of the water and throw it against the wall and see if it stuck. If it stuck, I figured I was good. I wasn't actually tasting the spaghetti to see if it was the exact right consistency for me. “Throwing spaghetti at the wall” is how a lot of people manage their money. They spend it until it's gone and wonder why there isn't any left over. Having your head in the sand or just guessing about how things are going isn't very empowering. Breaking free from this cycle requires confronting your financial reality head-on, a step that might initially seem daunting but is essential for building a healthy relationship with money.
At first, it may seem scary to define exactly what your money is doing. Yet, this awareness is the cornerstone of financial recovery plans. You might find that you are surprised in one direction or another. You might find that you are making less than you need for your monthly bills and investments. You might find that you are paying higher interest than you thought you were. The power in getting the “what’s so” about your money comes from knowing the truth and the nuances about it. The old saying that the truth will set you free, has been around a long time for a reason!
We also address overcoming money trauma and dealing with financial stress by encouraging you to engage with your finances actively. It's necessary to go through this exercise in order to get to a level of serenity and power around your money. For example, once you know exactly what your interest rates are on any debts you have, then you can create a strategy to pay down the highest interest rate first and eliminate that debt more quickly than if you just paid all of your debts evenly. How would you know that if you didn't already detail what your interest rates are? Another positive surprise might be that you find that you have more in that savings account that your grandparents set up for you that you weren't present to, because you weren't paying attention.
Paying attention to your money is the fastest way to grow your money. What we focus on expands, so you'll want to focus on what your net worth is. Tracking your net worth is a separate exercise that can happen after you detail what your expenses and income is monthly and annually. If you're interested in having a free net worth tracking sheet, please go to our contact us page and let us know and we will send you one, totally free! When you fill out the net worth tracking sheet every month, you are focusing on, you guessed it, your net worth. When you focus on your net worth your net worth expands.
While these exercises can be tedious at first, the bulk of the work is all up front. Once you have your spreadsheet, the amounts might shift a bit here and there but you won't have to redo it unless you take on a new credit card or get a bonus, for example. It's pretty exciting to add in money that you make to your spreadsheet, for example when you get a bonus or a raise.
The idea here is to start to play with your money, to look at your money, and to own the whole picture of your money. You wouldn't start painting a canvas and just paint one corner completely. You would look to be responsible for the entire canvas so that you can successfully have the full picture that you're looking to create.
So start today, pull up a spreadsheet and enter in what you owe and the date you owe it. If you get paid twice a month, you can split the amount that you need to take out of each payment into two, so you know exactly how much you have to invest and spend out of each paycheck. If you get paid four times a month then you would split what you owe into four, so that you know exactly how much you need to take out of each paycheck to cover your monthly expenses. Monthly expenses extend beyond necessities, ideally.
The journey to healing financial trauma starts with taking that first step–acknowledging your current financial state This is a topic we will go into greater detail during your coaching sessions. This method of saving and spending has made it possible for me and many others to live debt-free, and to borrow only from myself to travel to buy larger items and then to pay myself back with zero interest. Credit cards are essentially the devil. It is modern day indentured servitude. The system that I can teach you will show you how to save for yourself so that you can borrow from yourself and you won't rely on the credit overlords, or pay them exorbitant amounts of interest. You can keep all of your money for yourself and have it work hard for you instead of you working hard for it.
In conclusion, I invite you to begin today. Open that spreadsheet, document your debts, incomes, and expenditures. This simple act is your first step towards financial empowerment, leading to a life where you control your money, not the other way around! Let us guide you through money coaching and together, let’s embark on a journey towards financial serenity and empowerment.
