In my previous post, we acknowledged if you’re going to run a business, money is a thing you’ve got to deal with. However, talking about money can be taboo or scary. However, money can be a thing you can learn to empower, enjoy, and even use to have a more significant impact on the world you live in. Today we are going to look at some ideas for creating financial goals & habits this year.
4 Ideas for Creating Financial Goals and Habits in 2020
1. What do I need?
There’s a famous quote that says, “A luxury, once enjoyed, becomes a necessity.” And so for many of us, we don’t really know what we need.
But setting financial goals and creating a new relationship with money starts here.
Yes, we could get into the weeds about living in an apartment close to work vs. commuting and the value of time, but instead, just look at how you’re currently living and figure out what you need for the things that are TRULY not optional.
1. Rent or mortgage and utilities
2. Food and groceries
3. Insurance and healthcare
Beyond these 4 things, most things are a desire. Of course, this is different for everyone; for some people, this list will include childcare or care for an aging parent. I don’t need to nitpick. Instead, make a list of what is necessary and figure out what it costs by year and month.
This is your MVI – Minimally Viable Income. It can come from a job, savings, or someplace else, but this is the baseline for your financial goals.
*a note on necessities. I include some well-being items on my necessity list. Things like a massage every month and a gym membership or trainer. I know for some people this isn’t’ a necessity, and I wouldn’t include it if I wasn’t making as much money, but for me, it’s a necessity for who I want to be as a leader and man.
2. What do I want?
Once you’ve looked at necessities, you can start to look at what you want.
Do you want to go on two vacations a year?
Do you want to go out to a nice restaurant every week?
Do you want to send your kids to a fancy private school?
Now is the time to dream, take some time describing the kind of luxury that would make your life better and more enjoyable. Do this with mindfulness and intention, but really ask, “what does a good life look like for me?”
Then break down what that looks like for yourself, cost, and how much you need to make ON TOP of your necessities.
Of course, doing this just once can be hard so instead make a good, better, and best list and do a basic analysis of each to see what you’d need to make on a month to month basis.
3. What am I committing to?
Next, you’ve got to Set Specific Goals Related To Income Streams and Costs.
Sit down and write down the numbers. Get a rough estimate of what your goals are for the year.
Play with them on a spreadsheet. Consider other options. You need to TUSSLE with these numbers and really be with them. They might excite you, they might scare you, but no matter the case TUSSLE WITH THEM!!!!
Then come up with some ideas for where the money might come from.
Now it’s time to look for where the money might come from. If you’re a coach, you will figure out your current rate and then the number of clients you’d need on average at that rate.
Look for a mix:
If you’re working a job and want to become a full-time coach. Figure out how much you’d need to make from coaching to repurchase one day a week.
If you’re running a business and you’d like to improve your profit, look at your various offerings and costs and figure out what to cut and what to invest in.
Generally, people try to cut their way or earn their way into more money, and usually, it’s not that simple. Often, they need to spend some money to grow their businesses, or they need to cut some things to create space for things to improve.
Once you’ve got these fundamental goals, now you need to break them down. I like to break my goals down by quarter and month, but month to month is an excellent way to start.
4. How Will I Remember?
Last you’ve got to set up a rhythm of review. To go over your numbers and check in on your progress.
I think the best rhythm is once a week. But for some people, once a month will do. The key to a good rhythm is that it’s often enough to keep you on track, but not so often you get obsessive.
You can call this meeting a date with your money, and while there’s a lot, you can do here’s what I would cover.
1. Review your expenses
2. Review your sales numbers
3. Pay your bills
4. Reflect on the actions you’ve taken.
If you do these 4 things honestly, lovingly, and kindly I think you’ll soon find that your relationship to money will change.
It’s not glamorous. It’s not dramatic. There’s no mindset stuff. But it’s just like a lot of things I teach and talk about.
If you spend time on it.
If you’re intentional.
If you’re willing to be in the curiosity of it.
Eventually, you can learn to master it.
But don’t take my word for it, give it a shot, tell me I’m wrong, or find a better way.
Life is too short to keep this crazy racket you have on money.