There’s no question about it – many aspects of our lives look and feel very different now than 18 months ago. Some people have had significant change forced upon them over the course of the pandemic, and some people have made significant changes to their lives themselves.
Something about our collective experience over this difficult time has prompted us to think about change and transformation – we’re simultaneously tackling more DIY projects around the home than ever before, changing our fitness levels, altering our career trajectories.
I’ve certainly noticed that in my clients, as well as in the new clients that I’ve met and begun working with recently. So it’s given me cause to reflect on change and transformation, and the need to effect change in our financial lives ourselves. To help you achieve your financial goals, I’ve put together four essential tips for DIY personal finance.
DIY Personal Finance Tip #1: Identify and Prioritize Your Personal, Professional and Financial Goals
You don’t need a financial advisor to start to create your financial plan. Everything in my professional world starts with thinking about what my clients are trying to accomplish – then we lay the groundwork to get them there.
Anyone can do this. You just need to spend some time thinking about where you want to be in three, five, and ten years; what would need to have happened for you to be happy with where you are? Decide what is important to you, and then prioritize. What are your ‘must-haves’ and what are your ‘nice-to-haves’?
To help you do this, I have created a Passions and Pursuits worksheet which you are more than welcome to use to organize your thoughts around your priorities and goals. Click here to access the worksheet. Please note that if you are already a client or a subscriber, you won’t be able to access this page but you should already have had access to this worksheet anyway. If you can’t find it, please drop me a line and I’ll be happy to send it to you.
DIY Personal Finance Tip #2: Track Your Spending
Another thing that I ask my clients to do at the beginning of our professional journey together is to get a thorough understanding of their current financial habits. To do this, I ask them to track their spending.
As a newcomer to financial planning, tracking your spending is more important than you realize. If you do not know where your money is going, you’re not going to be able to make changes to ensure your money is being spent in the way that is most meaningful to you.
You simply may not be aware of how much money you spend on clothes that don’t get worn, on a car that drains more money from your accounts than necessary, on minor everyday expenses that can be reduced or even eliminated.
By being aware of where your money is going, you can make huge changes to your financial situation very quickly. You can divert your hard-earned money to things that are more important to you, and to achieving your goals. Again, this is something that you can do yourself. There is some fantastic technology out there to help you track your spending, including the following apps:
- PocketGuard
- YNAB (or You Need A Budget)
- Mint
- Goodbudget
Have a look through them and get to know what they can do. Then you can begin to track your spending and see where you can make real meaningful change to your financial habits.
DIY Personal Finance Tip #3: Plan Your Career Around Two VITAL Things
For most of us, our career is where we can leverage the most change over our financial situation. Your income is the driver for all of this. We can plot a career path to the income that we want, or that will help us to achieve our goals.
However, to simply plan your career only around income is foolish – but it’s a mistake I see too many people making. As well as thinking about your career in terms of income, it’s essential to think about the quality of life that your career can or does create for you. You would be so surprised how many people fail to realize that they have some choice here.
I am a huge fan of using career or business coaches because often we’re stuck in a rut and can’t see the way out of it without an outsider’s perspective. Coaches often have additional resources that aren’t available to you, and are in possession of tools and techniques to help you make the most of your professional capabilities.
By plotting a defined career trajectory and calling on professional support to do so, you’ll make a huge difference to your earning potential and your overall financial success. Reach out to other like-minded people in your industry and start working on a collaborative network. Find a specialist in your field of work to really get the best advice for you.
DIY Personal Finance Tip #4: Write Down Your Actionable Steps
You’ve probably read somewhere by now that writing down your goals makes them more likely to be achieved – 42% more likely, in fact. Neuroscience tells us so, as writing down something makes it more likely to be stored in your long-term memory. Thinking about why you want to achieve a goal, thinking about the timeframe of that goal and really defining what that success is going to look like adds to the likelihood of achieving that goal as well.
Another extremely important part of the goal-setting process is creating actionable steps. It’s a part of accomplishing your goals. It means that you can ensure that your goals are realistic and achievable. If your goals look too difficult or intimidating, you are likely to freeze and not make any headway.
Make sure you can visualize each step, and that nothing feels out of reach. Often going through these steps with someone else will help to keep them grounded in reality.
Prioritize Your Goals and Create Your Plan
If you follow these four tips for DIY personal finance, you’ll be well on your way to transforming not only your financial life, but your professional and personal life too. It’s our finances that allow us to achieve the goals we set for ourselves, and do things that are important to us. Your goal may be to create a comfortable retirement, a life of travel, setting up a business of your own, funding your child’s education.
Much of this can be accomplished on your own, and can be part of a personal transformation project. However, there are some ways to ensure more success with your finances, including fully understanding tax implications, as well as implementing a wise investment strategy.
I really do not recommend that you try this alone; in fact, I’ve said before that this is categorically not a DIY task. I wholeheartedly recommend calling in professionals to work collaboratively with you on these vital elements of your financial plan.
Not only that, but by working with other people, you raise your accountability not to them, but to yourself. People who enlist a team or create their tribe, putting their goals and targets out there tend to achieve them more quickly.
If you’d like to read further on any of these tips to avoid financial derailers, you’ll find more detail, tips and inspiration in my book. I’d also welcome you to get in touch and to see if there are any ways in which I can be part of your network to help you achieve your goals. A large part of achieving your goals is reaching out to whoever may be helpful along the way, and I’ll be delighted to be part of your team.
