How To Succeed with Your Financial Plan
We all have heard the financial advice for success:
earn more and spend less. If the
advice was so simple, then why are Americans going into further debt?
It is because sometimes simple solutions do not treat the real problem,
they just cover up the symptoms. To succeed with your financial plan,
you may need to go a little deeper to find the real problem and not just
follow the next financial advice fad. There are many reasons that
can contribute to your financial plan success that are not addressed
by "spend
less
& save more" including:
1) Determine your level of commitment
We are not usually asked about our commitment level before
starting an action plan. It is usually assumed that
the person
is committed especially if he is looking for help. Yet,
looking for help does not signify the level of commitment.
When starting on a financial plan, it is inevitable that there
will be a bump in the road. When this occurs, there is a a choice on
whether to persevere or to use the bump in the road
as
further evidence
to reinforce the belief of not being
good with money. When a person is not that committed
then they will probably decide that they are not good with
money and give
up. Failing
at the first sign of trouble can actually be worse than not
trying
at all. Because
if you are reinforcing the belief that you are not good with money
, then it
will be harder to
try again after a failed attempt. It may be better if you
did not try at all until you are really committed to succeeding,
so that
you
do
not
set yourself up to fail with a half-hearted commitment.
The key is to really make a commitment to yourself before starting. It
sounds easy. Yet, how many have given up on their New Year's
resolution before the end of February? To help you succeed,
envision yourself at the end of the process. What will
be different when you do succeed? What
are you really after? People are more likely to
persevere through the rough times when they have a clear picture
of why they want to change. So, see
the results from the end.
2) Determine why you are really doing it for
Is it getting out of debt? Or, having a secure
retirement? These are admirable goals. However, they will
have more power if you go to a level deeper and ask why you want
it. Why do you want to get out of debt? Do you want to
decrease stress or to live up to your commitment to repay your loans? Also
determine when you will achieve your goal
(measurable); make sure it is achievable.
Having a clearer goal will help you achieve it.
There is usually so much shame around money where many
people want want to hide their money secrets. However, this
just perpetuates the issues. Because when you are hiding from
your problems, you are not solving them. The
energy worrying about a problem would be better spent on solving the
issues instead. Having
a friend can help you drop the shame by sharing your money issues. So,
release yourself from this shame by telling someone. You
may even pick up helpful hints and ideas by having a friend involved
in helping you achieve your goal. Someone
who can lift you up when you are feeling down.
4) Find the plan that works best for you
One size only fits all for selling books. Everyone
is unique with their own set of issues and personalities. In
reading books, know that some of their solutions may help you while
others may not. They key is to try on the
new ideas and see what works for you and use those ideas. Do
not give up if an idea does not work for you, just move on to the
next idea.
5) Go beneath the symptom and treat the problem
Much of the current advice is on how to cut spending
and to increase income in order to save more. Yet, many
of these issues are symptoms of greater issues like lack of self-worth,
fear of money or worry about scarcity. These are the issues that
need to be addressed versus what we do with money. Money is just
energy. When we see the disruption of the flow of energy (e.g.,
with debt), then we need to find the cause and not just treat the symptom
(e.g., debt). It is similar to a sleeping pill; you
can take it a night or two if you are having a temporary issue. Yet,
if the issue is still around days later, the sleeping pill is only
treating
the symptom (lack of sleep), rather than the cause. So what
are the causes of your money problems?
Many programs today are very regimented
to make it easy for people to follow their advice. For example,
"Pay Yourself First" advice is about saving of 10 percent
automatically and makes it easy to set up and to follow. This
is not bad advice. However, it is set up this way under the
assumption that people will spend money that they have (lack of self-control). Thus,
it sets up a plan to save money automatically, without dealing
with the self-control issue. This is just treating the
symptom and not the cause. I
find automatic saving plans are great if they are in conjunction with
setting
up a budget and choosing to set aside a certain amount of money. This
is different than just "Pay Yourself First". By doing
a budget, the person is taking control over their money versus money
controlling
them. This
is the first step to getting out of the struggle is by taking control. Once
you have control, it is easier to adapt to what life throws at you
(e.g., higher gas prices) because you have already know what part
of the budget you can rearrange.
7) Look at what will happen if you succeed?
One question that should be asked is how
is your current situation (good or bad) serving me? You may
ask how can something like debt or not saving for retirement be helping
me? There
are several reasons that your subconscious may be thinking. One
of the main reasons may be that we tend to want what we are use to. If
we are use to money being a struggle, we tend to find situation in
which money continues to be a struggle.
Part of this is
due to the chemical reaction in our brain which is created when
we are
stressed
and struggling. Our
bodies get use to this chemical reaction (just like it gets use
to chemical effects of tobacco, alcohol or drugs) where our brain
wants
to find situations to create a similar chemical reaction (just
like procrastinators thrive on
the adrenaline
rush
of just meeting a deadline).
Another part is sometimes our
social network may be based on others who are in similar situations. If
we get a promotion or end our financial struggle, do we believe
that we might lose our friends because
now we have one less thing to talk about (e.g., money struggles
or bashing your boss - if you get a promotion to become the boss). If
we talk about how bad the economy is with our friends and our financial
struggles end, what is left to talk about?
Or, we just may not want to change. We fear
what may be on the other side of the road. If we view rich
people as greedy, why would we want to become like them? Even
though we do not want to become greedy, we deny ourselves wealth
because we think wealth will lead to greed.
So how may your financial struggles be serving you?
|
