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The first step to managing your money

When it comes to managing your money and ultimately improving your finances, the very first question you have to ask yourself is, why? Why do you want to increase your wealth? Why do you want to manage your money better? Why do you want to improve your financial status?

Now the mistake a lot of people I have coached over time make, whether it is to do with financial issues, their relationships, their health and so on, is they fail to get clarity as to why they want to change their situation. The principle is the same no matter what the issue in hand; unless you have clarity as to your why, and that clarity must be self motivating, you will fail to achieve your outcome.

In his book,7 Habits of Highly Effective People, Dr Stephen Covey said that one of the habits of highly effective people is they start with the end in mind. You need to envision what you want in the future so that you know concretely what to make a reality.

Unless you start out on your journey knowing where you want to end up, how will you ever know when you have got there? So as we are discussing finances, let me put to you a number of different scenarios that may help you to know ‘concretely what to make a reality.’winning at money management

  • You want to get married and not do so with any debt
  • You want to clear your student loans by the time you are a certain age
  • You plan to have children and you want to move to a certain neighborhood before they are born
  • Your retirement plan is worthless and so you want to increase it by a certain amount before you reach 50
  • You want to live debt free by the time you are 40

Whatever your reason, please ensure you are as clear and concise as possible. Simply saying ‘I want to have more money cause I’m sick of being in debt’ will not help you to change your situation and help you manage your money better. If having more money is all you can say, then email me your address and I’ll send you $10, mission accomplished, you now have more money. Effective money management takes proper time, consideration and action and so the more clear you are, the more focused you will be and the more self motivating your actions will be because you will know exactly why you are doing what you are doing.

Now before you start to take your first step into managing your money better, there are a few things I need to stress before you begin.

  1. This is not about getting rich quickly. Only lottery players, gamblers and scammers get rich quickly. Proper effective wealth takes planning and correct management so if you are hoping this is all going to make you wealthy tomorrow or next week, or by Christmas, forget it.
  2. This is most definitely not any of that law of attraction stuff. I will not be telling you to put stuff out to the universe, to make wish lists and image boards. I don’t have time for that and further more I don’t believe in any of that stuff.
  3. If you are in a deep financial mess, I strongly suggest that you get professional financial counselling from a fully trained and qualified advisor. This coaching is not a way of bypassing your responsibility to your creditors. Yes I did use these methods to help me clear a lot of personal debt without filing for bankruptcy, but I took the relevant action by seeing a counsellor first, making arrangements with my creditors and working hard. These steps were an addition, not a replacement, that enabled me to improve my finances and grow my wealth.

So if you haven’t yet taken the time to write out your reason as to why you want to improve your finances, then please do so.

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