Let’s take a look at your money situation. No, stay with me, it’s not going to be that bad.
Just like the other sections in the Circle of Life, we have to figure out where you are and where you want to go. Finances can be a trigger for some very negative emotions for most people. Marriages can end over finances. People have taken their lives over their financial state. This is probably, to me at least, the most serious of sections; however, it doesn’t have to be. Taking control of your finances can be the most empowering thing you’ve ever done. Short of winning the lottery, there is no quick way about it though.
To get a good understanding of where you’re at it’s best to get your credit report and pull at least three months of bank statements. In the credit report link there is lots of information about how to read your report and what to look for. If you still don’t understand what you’re looking at try here. You really need a good understanding how how your credit report works, what negatively and positively affects it, and how to make the best and quickest impact on your score.
Then look at your three months of bank statements. Make a list of all your bills that come out monthly and weekly, what date, and for exactly how much. After that make sure you list anything that comes out quarterly and annually as well and anything else that might not be so regular. Next add to your list the other things you spend money on: food, clothes, entertainment, gas, miscellaneous stuff. Use your bank statements to jog your memory and to get an accurate look at how much you actually spend each month in those categories.
Lastly, tally up all of your monthly income and compare it to your expenses (not your debt yet). How are you sitting? Many people will realize that they are either spending more than they earn or that they are close to that. It’s a scary sight to see it in black and white but in this case, knowledge is power and the more power you have in regards to your finances, the better. If you fall into this category, it’s time to figure out where you can make cuts. No matter where you are it’s important to stay on top of your finances and always be tweaking them to improve your situation. If you get to the point where you have decent money left over, then you should start working on a plan to pay down your debt if you have it.
Now, I’m not a financial adviser (obviously). If at any point you feel like you can’t do this on your own or that you have no way out of a negative spiral with your finances, get help from a professional right away. Don’t wait, it doesn’t get better. Bills don’t magically get paid, you most likely aren’t going to win or inherit a ton of money, and the longer you wait the more interest and late fees you’ll rack up. Take the step now to correct the issues you have with your finances. Focus on this until you have control over them and you see a light at the end of the tunnel and then always revisit them monthly to make sure you’re still going in the right direction.
Now you have a picture of where you’re at. Where do you want to be? Really? If you tell the Universe that you’d like to have just enough to survive, that’s exactly what you’re going to get. Your subconscious mind will work for exactly what you ask for. I heard that money can’t buy happiness after you reach about $75,000 a year. (That’s a Huffington Post link btw, cute article.) So that’s my goal, why make more money than will make me happy?
Oh, right… Money can’t make you happy. Well, that’s still my goal. I don’t want to be rich but I don’t want to struggle. I’ll be honest, I’m only about half way there, but I’m working my way up and I will get there!
Visualize what it will feel like to be a #10 with your finances. Write down, in detail, what that entails for you. How good will it feel to have all your bills paid on time without stress? Or when you have a sudden expense, you don’t have to worry because you have a savings fund for that and you’ll be good. You have to know in every fiber of your being that this is 100% possible. For. Everyone. Yes, even that person you just conjured up in your head to prove me wrong, that person can reach his/her level 10 as well. Remember, everyone’s 10 will be different.
Now, honestly rate yourself. Where are you sitting completely with your finances? Normally during a coaching session I would have someone work through all the sections of their Circle of Life before making goals and prioritizing everything and setting up an action plan; however, finances have an impact on every other section here. So, if you are feeling motivated, are on a roll, and want to start making progress here, go for it. Do it. Take those steps. But stay with me for the rest of the Circle. We still have several sections to get through.