Many people are very diligent at their work, being exact in their jobs and creating a huge WORK success for themselves. But in their personal life, they are lax. They don’t approach money and life in the same way that they manage their job. They fail to become successful with their personal finances.
We are adverse to looking at our money. We’re afraid of what we’ll find. We may think that we’ll have to deprive ourselves forever if we really see what our money is doing. We don’t want to spend the hard work to take command of our money. Or we just don’t know where to start.
It’s time to stop being afraid of your money. Don’t let it control your life. It’s time to take charge and rule your money to work for you.
Get down to reality
Money energy can be illusive. It can come in abundance. It can come from out of the blue. It can also make big promises, then bring misery and squelch your dreams. Money is a mood changer. Think about how happy you are when you have money, and how frustrated you are when you don’t.
Money has so much power over us. We can change that.
It’s time to be realistic about your money. This is the first step to taking charge of your money; take away any illusions or false beliefs you have about money. Your money beliefs are deep, so you may not see the dynamics at first. You can understand your money relationship better by practicing self awareness, and bouncing off your ideas and beliefs with a trustworthy and non-critical person who’s able to give you feedback. Question your beliefs. What is it that scares the crap out of you when you have certain thoughts about money? These beliefs are the key on why your money controls your life. Challenge yourself to find a different set of beliefs.
You are the CFO of your life
Approach money in a matter of fact way. Numbers and plusses and minuses should not have that much emotional control over you.
One way to approach your personal finances is to act as if you were running a business. When you approach your household finances as if you were running a business, you not only become more aware of your money, but you also take action to keep a tight control on both sides of your inflow and outflow of cash.
As CFO, you can take several steps to creating a profit in your personal finance. This will take time and attention, so anticipate that you’ll be running your business on a daily basis, just like you run your life. The more time you put into the business of your life, the more successful you’ll be.
Sit down and create goals for yourself. What is it you want to achieve in 1, 3, 5 and 10 years? Do you want to pay off that credit card so you have more spendable income every month? Do you want to take that dream vacation you talk about every year? Do you want to buy your own home? Do you want to retire early?
Choose a goal that gets you out of bed in the morning. Make it something that you’ve always craved. Make it positive and something to work towards, rather than trying to get out of something negative. For instance, if you want to leave your job, instead of focusing on that, decide what you’d rather do (like start your own business or going back to school, for example) and make that your goal. If you need to pay off a credit card, instead of focusing on climbing out of debt, focus on becoming debt-free. Become a problem-solver. This little trick will make a huge difference in your mindset.
This personal goal should be exciting enough to motivate you into changing how you manage your money. I can’t emphasize this enough.
Draft a plan for yourself. Give it a timeline. Write it down and create your mission statement. This is your personal mantra and you will live by this. Put your energy into this plan to fuel you towards your success.
As CFO, you will need to cut the spending fat, and make your cash outflow leaner. This will only happen if you start actively managing and becoming proactive with your money. And this won’t happen unless you create a budget.
To the budget adverse; I know, I know. But hear me out.
You won’t create success unless you know what’s happening with your money. Treating your personal finances as a business and monitoring the earnings and expenses is the best way to get a handle on your money.
If you think you don’t have enough money to live from month to month, look at your cashflow in detail; break it down to the penny of where you spend your money. You’ll be able to find some leaky holes that need plugged up.
Fortunately, budgeting has become easier with several tools and resources. It will be a learning curve, but if you’re motivated towards your goal, you will dedicate the time it takes to learn a new skill for managing your money.
Besides, you are the boss of your money, and from here forward, your money will not rule you. You will whip it into shape and make it work for you. But you have to do the work to make this happen.
Measuring your success over the long run
Your finances can be wittled down to a number of what’s called your net worth. It’s a picture of your current wealth as of right now.
This takes everything you own of value, converted into dollars, minus your outstanding debts, also converted into dollars, to create a net number dollar amount. This number is the barometer for your success. From this number, you can measure if you’re going backwards or forwards (or up or down) in your net worth.
If your calculation is a negative number, the goal is to make it a positive number. If you have a positive number, you’ll want to increase that number. You accomplish this by working your budget and keeping track of your income and expenses. It’s that straightforward.
Making a profit
Now it’s time to take your plan and bring it into action. You’ll dedicate a number of hours per week towards your business. Start working your budget, create a financial plan, set goals to increase your net worth, and work towards your master goal. Every month, you’ll do some financial forecasting for the next month. You will find where you need to cut back and where you may be able to increase your stream of income.
What I hope for you is that you’ll start to see what’s important in your life and what isn’t. When people take these above steps, they start getting clear on the more important things in life. They may find that they don’t want to spend the money on that huge house, they’d much rather travel, so they downsize. They find they can live on less. Funneling money away from the things that aren’t important to you, towards the things that are important, is the best way to positively manage your money.
Become quietly wealthy
This ain’t no get rich quick scheme! You won’t win the lottery, or inherit a million dollars from a long lost relative. This is a slow, steady way of increasing your net worth and having more money over the long run.
Over time, you’ll notice there’s a positive increase in your cash. You’ll start to feel the loosening of the pocket book and you’ll start to breathe easier as your profit margin grows. lt may take a couple months, or a few years. But as long as you continue to work on minimizing your expenses and finding ways to increase your income, you’ll be able to grow in the right direction towards wealth.
Cha-Ching Money Blog helps you manage your personal finances by giving you tips on changing your money mindset and lifestyle. Sign up for our newsletter for ongoing tips, stories and ideas on how to make your money work for you.