If you’re thinking, “well, that’s not a part of my job”, your reaction is understandable. But this question is referring to your personal and family finances. Now, let’s look at this question again – how many budgets are you managing for the important money matters of your life?
If you want to make a significant impact in your financial life in 2022, a great way to do it will be to begin with a self-assessment of the current state of your finances versus where you want to be.
My general guess is that you want to be at least, financially comfortable. My personal definition of being financially comfortable, is to be able to pay all monthly, semi-annual, and annual bills on time, and possibly fully, if that strategy works economically and credit wise in my favor. There are financial experts who would advise that if you have limited monthly funds you should focus on paying the minimum amount required on every one of your bills before opting to pay any of them off completely. The reason for that school of thought is that you want to ensure that you’re not hurting your credit status and rating by not making those minimum payments to each of your creditors every time a payment is due.
The second half of my definition of being financially comfortable is, to be able to achieve other goals with my money that enable me to pursue much needed self-care. I should be able to refresh, recreate and re-energize myself and my immediate family, at least once or twice per year. The level and magnitude of your re-energizing is truly an individual determination. ensuring that you're financially covered to do it however, is a great reason why every adult responsible for self and others, needs to seriously consider adopting this multi-budgeting (mini-budgets) approach.
So, back to the process of budgeting and having several mini accounts – we all have a multi-dimensional concept of the short-term and long-term goals that we want to achieve annually with our money. However, studies show that approximately 84% of persons in the U.S. make and break their new-year money resolutions by the first two months of the year, and a smaller percentage of these persons lose their motivation to improve their patterns within the first two weeks of the year.
Given these statistics, what can one do to get inspired and then, maintain a stronger commitment to reaching our money goals?
- One motivating strategy is to recall the unsatisfying results we've gotten at the end of each year, for not having had a specific plan to manage our financial responsibilities. Once we realize that we are truly in control of our circumstances and that every decision we make any given week affects our financial outcome at the end of the year, we gain clarity about the ways certain modified behaviors can turn these results around in our favor.
"Well okay" you might say: "so why not just set up one budget and have all expenses and self care goals listed in one checklist?
- Setting up smaller, mini accounts for your important categories of financial responsibilities and desires, truly makes it easier to follow the steps you will take to ensure you're depositing the funds needed for each of your established financial goals.
Examples:
Recurring bills account – such as your utility bills (water, electricity, gas, cable, etc.)
Credit card bills and other personal loans account – such as a car note, a home mortgage, home repair loans, and student loans.
Self-care account – such as semi-annual or annual road trips and other types of vacations, personal needs and other personal items.
Insurance and Future Planning account – such as medical insurance, life insurance, car insurance, home appliances insurance and retirement planning.
**There may be additional account categories that you should establish for yourself to make your financial planning and organizing, personalized and most effective for you. At minimum, if you’re not setting aside the funds to cover the above-mentioned necessities, you have now discovered the reason your budget hasn’t been properly addressing your financial obligations and needs **
The self-assessment that you must now do, starts with completing an inventory of all financial obligations that you have and listing each one, under one of your established mini-budgets and corresponding mini-account categories. This then reveals for you how much money you need to set aside monthly for bills, annually for insurance, semi-annually for self-care/vacations, and so on.
Remember, setting up your mini-budgets doesn’t have to be a stressful task. When it is, it is more so, because you may be procrastinating, and avoiding getting started with certain aspects of the process. If anything, completing that initial financial inventory should be a very freeing experience for you as you contemplate how much your finances will improve!
Once you’ve gotten clarity about where you are, and what you want to achieve with the money that you earn, you can then set goals that you can honestly assert are specific and realistic.
It is now time for you to apply some accountability metrics to the process. You must know what meeting the goal will look like, as well as those interim steps you'll be taking to achieve it. You can now easily establish your metrics to know when you have successfully completed the smaller steps of each smaller task.
Make an appointment to discuss these ideas with me, your life empowerment coach, by clicking on the 'Contacts' page and leaving your contact information, to ensure your goal and steps are realistic for your income, and that your resources are truly making your tasks manageable.
Get your financial affairs quickly and easily in order, and yourself in a state of financial wellness! There is no reason under any budget for your personal finances to be a constant fright!
I look forward to working with you to convert your financial future into a true delight !
Coach Mandy S.
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