We’re headlong into autumn with crisp air and fall foliage. With the change of season, especially if you live in a cooler area of the country, you take specific steps to prepare your home for the cold weather: you push the screens up and pull the storm windows down. You take in the outdoor furniture and take in the hoses. There’s a certain habit you’ve established every year to get yourself ready. I’ve been watching the squirrels gather acorns for their winter survival.
The same mentality should be established as it relates to your financial life for redirecting your thinking from summer relaxation to a strong, focused effort to make your life more financially secure.
Here are seven rules to bring you closer to a more efficient and satisfying financial life.
1. Begin with several questions concerning your money life:
- Of what am I most proud?
- With what have I done well?
- Have I lived up to what is most important?
- What do I need to improve?
These questions help you focus on where you are currently, where you’re going, and they set up a potential meaningful conversation with your spouse, significant other, children, etc. You must first have clarity for yourself before you talk to others.
2. Have a values conversation with all stakeholders. Discuss what’s working and what’s not—recommit to a refreshed attitude of working together; being more attentive to issues that might have fallen through the cracks or become side tracked due to other issues.
The challenge in having money conversations is to set boundaries and rules with the goal of avoiding blame and defensiveness from creeping into the space. The conversation should focus on values:
- What do you value most?
- What must happen in order to feel good and satisfied about your progress?
- What will provide the greatest sense of comfort?
Understand that your belief and attitude about money comes from your childhood, and your “normal” might only be yours and not your partner’s. It is vital to come to terms with the idea that what we believe might not be supporting our values and therefore we need to adjust, and improve, our thinking.
3. Take a look at where you are now and where you need to be as it pertains to your goals for savings, risk management, and other financial areas. This assessment is all about what’s coming in the door and what’s going out:
- How much is being applied to goal-oriented targets?
- Where are the potential traps, pitfalls, threats and transitions that could derail progress?
4. Hire professionals to help. For example, unless your tax situation is blatantly simple, hire a qualified CPA to help you. Now is the right time of year to have a tax projection completed and to look at any potential tax strategies before the year end. Work with a qualified and experienced estate attorney to prepare or update your Will, Powers of Attorney, and Health Care Directives. Don’t rely on computer-generated forms; there’s too much at stake. Seek out a qualified fee-only financial planner who will help you navigate areas of concern that range from retirement and college planning, risk management and saving and spending plans.
5. Set reasonable goals and set up accountability. It’s always helpful to have a goal, a time limit, and support along the way. Working in teams makes for a more practical and joyful journey. Can you remember a time when you accomplished something big with someone else? Maybe you and your spouse worked really hard to save for a down payment on a home? Or maybe you both cut back on spending to pay off a credit card? Remember a time when you experienced success and anchor that memory to your ability to do something today that is challenging. It helps!
6. Have a plan—work a plan! Without a roadmap, it’s challenging to arrive at your destination. Work with your planner to create a written plan that details the fundamentals: Why, What, Who, and When. Make the plan as granular as possible; detailing each step carefully and thoroughly. Ask questions of your planner and make sure the answers are understandable, not filled with jargon or financial double-talk. It’s your life and your money; it’s not too much to ask your advisors to speak your language.
7. Check your progress. Set up weekly, monthly and quarterly check points and be ready to make adjustments based on any changes that occur. No plan should be etched in marble because life just isn’t like that. There’s no “set it and forget it” when it comes to your financial life. Remember that your ability to communicate about money is vital to the success of your plan and your financial life.
Getting your money life back on track provides a great sense of comfort and purpose when the plan and goals are centered on your values. Every step you take makes you feel better that you’ve identified potential problems and considered a possible solution. Think of it like winterizing your home—you’ve pulled down the storm windows, wrapped the pipes, and added insulation where possible. Let the winter come; you’re ready!