Being “great” with finances draws heavily on the creative processes, tapping into essential skills like consistency, visualization, big-picture thinking and discipline. Spreadsheets, budgeting, reading investment statements and number crunching are monitoring mechanisms to ensure that your larger financial strategy stays on track.
So the next time you mutter, “I just don’t get this money stuff,” insert a healthy reframe along the lines of “This seems like a good time to check in on how my financial strategy is going.”
The art of wealth building has four principles that anyone can follow. And, sticking with these financial systems can help your money mindset improve.
Saving is the magic ingredient to a mindset transformation
Saving money is an act of self-love. It has the power to help you rein in overspending and get you excited about what’s down the road. Consistency with saving, even in retirement, supports great long-term habits that will make you feel financially fabulous quickly.
Make net-worth tracking a ritual
Tracking your net worth feels good, so do it regularly.
Net-worth tracking is an accounting of all your assets and liabilities. The balances of individual accounts, loans, investments and mortgage all need to be noted on a monthly or quarterly basis. Subtract the liabilities from assets – that’s your bottom line – and it’s the big picture.
When you’re still working, your goal is to see your bottom line improve monthly. That means your budgeting and spending tracking systems are working. If it’s going down, your budget and/or spending behaviours might need tweaking. When you’re retired, it’s normal for your net worth to start to decline a bit if you are using your assets to fund your life. The goal is to optimize what you’re withdrawing and not take too much, too quickly.
Dream big and make a plan
Dream how you want the next five years to go. Envision your days, the travel you want to do, the people you want to be with. Now, work with your financial planner or money coach to incorporate these dreams into a comprehensive plan. A financial plan includes an income projection for retirement, outlines a framework for your investment performance, deals with debt, and flags expenses that might be too high (or low) and that do/don’t support the life you want.
Budget with joy, not disdain
Budgeting is a monthly mindful practice to identify the money coming into your accounts and plan where it needs to go. The goal is to ensure that your inflows equal your cash outflows, and nothing more. Otherwise, you’re going to have to trim your spending. Prioritize joyful activities and expenditures that you can afford. Pare back spending on anything that seems wasteful to you. The happiest budgeters find creative ways to stretch their money as far as it can go.
My financial wellness practice serves many creative types, some who have never worked in a spreadsheet – ever – and they’re all very good at managing their money, no matter their professional background or personality, because they take time to understand their investment strategy, they know if they’re moving forward (or not), they prioritize spending on their future, they work toward a vision, and they understand when they need professional help and aren’t afraid to get it.
