So you’re ready to start learning about managing your money, but where the heck do you start?.
There are five things you need to understand to be successful.
Where you ever taught about money or have you been kind of figuring it out as you go?
Chances are good that you weren’t taught anything, yet you are supposed to know how it works, and it can literally be the difference between life and death if you get it wrong. Talk about anxiety provoking.
Not only do we not know how it works, but money and personal finance are linked to all kinds of emotions. There’s fear, anxiety, embarrassment and anger when things are not going right, and peace and confidence when they are. I want you to put a stake in the ground.
How do you feel about money?
Go down to the comments below and put in one word describing how you feel about money. I promise, no matter what it is, you aren’t alone.
Financial planning for women is especially important.
According to a June 2018 Forbes.com article, and I quote, “90% of women will be solely responsible for their finances at some point in their lives — whether from staying single, experiencing divorce or simply living longer than men. In fact, women live an average of five years longer than men, meaning they need to support a more extended retirement and are also likely to have higher health costs down the road. And yet, in one survey, 61% of women said they would rather discuss the details of their own death than money!”
That to me is eye opening.
We all frequently let our emotions make financial decisions for us…again, you aren’t alone.
So lets jump to the practical side of personal finance. I created the FAST Money Management System that includes the 5 pieces you need to understand.
Achieve balance in your budget and debt
Save and invest wisely
Tomorrows retirement is secure
So where do you start to learn about money? How much is enough money? Where should you focus your time and energy?
I believe you need to step back for a few minutes (heck…let’s be realistic, you are going to need hours over a bunch of days so give yourself some permission here). You need to understand the basic components of each but more importantly, you need to understand how they fit together.
Think about it.
Debt management only works with budgeting if you can afford to live and pay off those credit card bills.
You can’t save if you owe money and if its not part of your budget,
If you haven’t budgeted and saved anything, you have nothing to invest.
You don’t know how much to save and invest if you don’t understand how money works in retirement and how much money you need to retire comfortably.
They are completely interlinked.
Then you need to add one more component, the sixth component…. yes, I know I said there were five, but there is another that compliments the five. Time.
All five components work together over time.
When everything works together from today until the day you die, you have created a success personal financial plan. I think of this concept backwards. If you understand how money works in retirement, then you know how much you need to save and invest, so you know how you have to fit saving into your budgeting and debt management today.
If you create a vision of what you want your retirement income plan to look like, you can get there. If you can see the path to your future, you will know what milestones and steps you need to reach along the way.
Once you have the path laid out, you will know exactly which of the five pieces you need to work on to be successful. And I guarantee over time, you will focus on different components as your life unfolds. Maybe today you need to focus on debt management. Maybe its increasing savings. . Maybe….you are on track and don’t need to focus on anything in particular.
It’s time to think about personal finance in this new way.
Everybody, and especially women, need to take the time to learn how their money works and create a plan that will allow them to take care of themselves.
We can’t sit back and wait for someone to do it for us. Remember that statistic. 90% of us will need to take care of ourselves financially at some point in our lives.
We need to educate ourselves on how this works.
I’m including two, absolutely FREE things below that will get you started. One is a quiz that looks at your emotional relationship with money and the other is a guidebook of 7 easy things you can do today to get started managing your money.
If you found this article helpful, please make sure to share with someone you know who needs some help with their personal finances.