Whether you’re used to living on two incomes or one, finances for many are a struggle.
There is no doubt about it, even when you make good money.. The cost of housing, child care, and taxes really reduces what we have to spend on everything else. If you’ve suffered a set-back like a job loss, illness or a divorce, finances are hit even harder.
It is not uncommon, to be fearful, for good reason, about the finances.. You may not even know what the financial situation really is if someone else took care of it. If you have hospital bills, they tend to trickle in.
I was in a lot of debt after my divorce and had been an intern appraiser and a homeschooling mom before this, without retirement savings.
Financially, I had a lot of anxiety about my future. After all, I not only had to make up for 20 years of working part-time jobs and not saving for retirement, but also pay off big debts and send 4 boys to college.
My business clients sometimes struggle to get back to where they were before this pandemic, because of the emotions, anxiety and overwhelm of it all. If that is you, know that it is only temporary.
If you have a good job, that is a plus!
If you are unemployed or underemployed like many women, you may have to manage carefully with what you have. You may feel stuck with no options, which can be traumatizing.
No matter what it feels like, I promise, you have some options, and I can help you to see them. Finances seem like the biggest of all struggles, but often it can be your biggest launch pad to freeing your relationship with money.
Because of this I have broken down some of these things so that you can deal with each of them right away and buy yourself some space to design and create the life you really want!
Get Your Finances Healthy
These tips support you to make good financial decisions. This is the foundational work to “Double Your Income,” which is one of the things I work on with clients.
There are five keys that will guide you to get your finances in shape and healthy.
The keys to improving your finances are quite ordinary and extraordinary at the same time. The keys themselves are pretty routine advice, the mindset behind them and the change they will make in your life, if adopted, are anything but mundane and I will prove it to you.
“The ACT of managing your money, is more important than the amount.” ~Penelope Jane Smith
Let me start with a brief story:
When I was about 7 years old, my parents bought a second house. I remember being there working. All of my parent’s friends were there and their kids. We kids were picking up heavy, broken pieces of concrete around the swimming pool and putting them in the wheeled-barrel for the men to take out to a dumpster.
Inside, we pulled up musty, stinky old carpet and pulled down dirty, dated draperies. We pulled out the appliances from the kitchen and scrubbed the walls with gloves and a powdered soap called TSP before we could paint. Needless to say, we were working hard.
Therefore, I asked my mom, “Are we rich? We have two houses.” I knew that many people didn’t own their homes, so owning one was a big deal.
My mom replied, “Oh no, Honey! We have to sell this house as soon as we can, just to pay our bills.”
Unfortunately, this was the beginning of a belief I adopted and kept for nearly 4 decades, “You have to work really hard, just to pay your bills.” Can you imagine what that created for me in my financial life? Well, perhaps you can, because you have some of those beliefs too. It wasn’t pretty!
The keys to financial success lie in your mindset, first, and then, affect your behavior. That is just how it is. So, I’m going to share 5 money habits, as well as, how they transform your entire money story.
Key #1 Pay Yourself First
Now, if you’ve just had a set-back in this current pandemic, this is a perfect opportunity to start paying yourself first. People understand and are more apt to give you grace. Anyone, however, can begin this at any time. Take the top 1%-10% from your income and put it in a savings account.
What you say to yourself by paying yourself first is “I value myself and my work.” It transforms your money story because you value your work and expect to be paid for it, instead of paying everyone else from your valuable work. In the long run, you will earn more money with this mindset.
Key #2 Save a Portion of All You Earn and Never Spend It
Likely as not, you work hard for your money. Therefore, a portion of what you pay yourself first you need to save, and keep! Later you can take the interest from this account and reinvest in something. Keep the principal somewhere safe without touching it.
Most incredibly, what this practice says to your unconscious mind is that “A portion of what I earn is mine to keep.” The reason that this transforms your money story is that it tells your unconscious mind, “I have Money.” “You can no longer say to yourself, “I can’t X because I don’t have any money.” You have both seed and harvest money.
Moreso, it tells you, “I have more money than I will ever need.” Imagine what this belief does for you? It also allows you to see that the more you grow your investments, the more interest you earn. When you earn enough in interest, you are financially free and no longer have to work for money.
Key #3 Establish a “Life Happens” Fund
Clearly, this is an account to cover expenses in an emergency or high expense months, or low earning months if you get paid by commission. Especially important if you have a changing income that is difficult to depend upon. Also, it will help for instance if you need unexpected expenses, accidents, or illnesses.
Additionally, this covers your out of pocket maximums from insurance and 6–12 months of expenses if you need, or have, to change jobs.
Fortunately, this gives you a healthy financial security. You no longer have to worry about low commission months causing financial strain and you never have to stay at a job you don’t like.
Moreover, this saves you money, because, you can choose a higher deductible insurance plans, saving you a lot of money every month.
In addition, the beliefs this changes are transformative. This changes your story about money from, “I never have enough money,” to “I have money, and money has my back!”
Key #4 Enjoy allocating your money
The key word here is “ENJOY!” Do you know someone who complains about Paying the bills? Well, if you do that, then you are making drudgery out of something that can be to your greatest advantage.
It is not important how much money you make, but more important that you put it to good use.
Consider this, having a regular date with your money. Where you spend some time with it, track and count it, and give it your undivided attention.
To illustrate, if you never spent any time with your partner, would he or she stick around? Probably not! Money is no different. If you aren’t tracking it, it will tend to slip away a bit at a time. Yet, if you are spending quality time with it, you attract more.
In contrast, you allocate your dollars, just like little associates to go do jobs for you. These dollars buy you healthy food, these pay the internet bill, those you keep for reserve. Hopefully, some of them have the job to make you more money.
Now, what you’ve done is change your mindset from, “I work for money” to “Money works for me.” This will ultimately change your whole money story as you begin to learn to put money to work for you to do things you want and ultimately make you more.
Key #5 Learn all you can about investing
Now, this is not a call to beat yourself up or feel bad. Honestly, humans are notoriously bad with money. We haven’t had that much experience or training. It’s not a topic we learn in school or most of us at home. However, there are many classes, books, and trainings to learn about money.
Of course, you might think, “I don’t have time,” or “that doesn’t sound like fun.” True maybe, yet think of the cost over your 80 years of a life span of forgetting to do something with your money? If you retire at 65 and live to be 85 or even 95, you have 20 or 30 additional years that your earnings have to stretch. Ponder this, can you really afford not to learn about money?
Also, if you leave your investment up to someone other than yourself, you have a high chance of later regretting that decision. Ultimately, your results are up to you. Therefore, you should understand why you are invested the way your professional has it.
Investing is important for your future. Yet, only invest in things you really understand. Think about it, spend some time learning about money, and it will pay you back in big rewards.
Lastly, the cost of ignorance here is really very high. The way this learning about investing changes you is that you begin to think creatively about how you can grow your money. You may think of the most exciting ideas you have ever thought about. You may come up with a new business or innovation just by beginning to learn about investing.