Make Your Life Grow, Wealth Will Follow
Thinking about the arrival of the summer with its long sunny days filled with fun activities, kids’ summer camps and maybe some travel? As enjoyable as those thoughts are, it’s almost inevitable to keep the high level of summer’s cash outflow and the B word out of our minds: BUDGET. If the mere thought of a budget makes you cringe, you have plenty of company. Take a different look at the concept of “budget” so it stops being a nagging idea, living rent free in your head. Turn it instead into a plan that leads you into the mission of living a purposeful life.
The Beauty of Mindful Cash Flow Planning
When it comes to cash flow planning, the best approach is to really take the time to think about your own preferences and needs and come up with a spending plan (rather than a straitjacket-like budget) that reflects YOUR priorities and values. Take an honest look at how you’re allocating your money: is it the result of a mindful process or is it thoughtless? Is your money going to where you intended it to go or are you too distracted running on the hamster wheel of life to plan for what you really want to do with what you have? Your calendar and your cash flow should reflect what really matters to you: do they?
Think about successful cash flow planning as coming up with a spending plan that reflects your priorities and values, that spans beyond the current year and is guided by mindful spending. Setting goals that are meaningful to you will give you a sense of purpose and give you that extra boost of energy to keep on going even if you experience setbacks along the way. Allocating money to the right places helps you live the life you really want to live: full of purpose, no straitjackets and no improvisation.
Designing The Best Plan For YOU
The way you see and use money in the present is the result of spending patterns experienced in the past, particularly during your childhood years. Are those things the right things for YOU, TODAY?
Take an in-depth look at what you are doing and why you are doing it so you can consciously identify the underlying beliefs behind your actions. This is powerful information that brings the necessary awareness to your financial decision making process. Once you become mindfully aware of what you’re doing and why you’re doing it, as well as what is lacking in your life, you are ready to tackle designing a spending plan that reflects who you are, what you want and how to get there.
This is easier said than done. Sometimes people’s strategy is just to try to keep up with the Jones’. In most cases, that’s a recipe for disaster. A better approach is to sit down and bounce ideas with someone who can help you identify what really makes you tick, what short and long term plans make sense for you and how to set in motion the process of making those plans a reality. To help our clients with this process, we partner with Money Quotient, an organization based out of Seattle that is focused on financial education and research that looks into both emotional and practical factors that enhance or hinder an individual's quality of life and financial satisfaction.
Keeping Track Is the Key to Success
Coming up with the plan is just the start of the process. The key to successful cash flow management is tracking where money is actually going and conducting periodic reviews to assess where things are and whether you need to rethink your strategy given changing circumstances, or adjust course if you’re steering away from what you really want. We’re not gonna lie: keeping track of where money is going requires a time commitment, but it also has huge advantages!
Nowadays, there are apps that can help you with this task. We love the “You need a budget” app. It’s user friendly and an excellent tool to keep track of where our money is going as it aggregates information from different sources and classifies our expenses into different categories with very few manual adjustments needed. It saves us tons of time, keeps us organized and helps us determine what business or other expenses can be written-off come tax season and that’s -literally- a win in our books! If apps are not your thing, an excel spreadsheet or good old pen and paper can do the trick, provided you establish a hierarchy of what you want to do with your money and by when, and have the discipline to make monthly inputs so the information is easily available and updated. Keeping track of your expenses can reveal habits you are unaware of: do you -or your spouse- really spend THAT much on ____ (fill the blank)!?! You might find truths you don’t like, but it is the reality of your life and it’s always better to work with realities than with assumptions. You can’t plan if you can’t measure.
Do you have a spending plan in place that aligns with your priorities and values? Are you mindfully allocating money into buckets that are right for you? Are you satisfied with the balance between accumulating wealth and enjoying the life you have created for yourself and your loved ones? Just like Bill Perkins, author of the book Die With Zero, said about his book: “[it’s] not about making your money grow - it’s about making your life grow.”
If you’re not there yet, contact us. We can guide you by asking the right questions and helping you plan how to execute the answers. We’ll help you keep the plan in check and come up with adjustments when plans or conditions change. Ready to start planning? Let’s do this together!