Make some financial resolutions

Improve your relationship with money so it becomes a form of energy you attract and embrace. Learn that money and meaning are not polar opposites.

by Todd S. Smith — 

New Year’s Day may have come and gone, but that doesn’t mean you shouldn’t make some resolutions to improve your finances. Taking care of your financial business early in the year could help keep your finances in shape for this year and beyond. Here are five things to do now and throughout the year to transform your finances and your life.

Are you aware that consciously and/or subconsciously, you have a relationship with money? Take time to understand how your money belief systems manifest into your daily interactions with money. If the way you earn, save, spend, invest and gift money is not in harmony with the life you envision, I can guarantee you have a belief system that may need to be adjusted.

Make this a year to improve the way you think about and relate to money. Improve your relationship with money so it becomes a form of energy you attract and embrace. Learn that money and meaning are not polar opposites.

Create a dream roadmap. Those who plan are exponentially more likely to succeed than those who do not. Block off a couple hours on your calendar to dream and envision where you would like to be next year, in five years and 10 years from now. Work backwards to create the steps that will get you there. Make them SMART: specific, measurable, actionable, realistic and time bound.

Get your house in order. Many new clients are embarrassed to admit how disorganized their financial lives are. Be gentle with yourself and don’t be ashamed — make a commitment to reversing the trend. Take time to de-clutter, systematize and automate. Create a system for organizing old paperwork and handling new information. Try a three-ring binder for old statements and bills. Lastly, leverage great online advancements to automate paying yourself (saving/investing), paying bills and tracking expenses. Using Quicken or QuickBooks linked to your bank accounts can do wonders for your clarity, control and peace of mind.

Educate yourself. The level of financial literacy in the U.S. is dismal, at best. You don’t need to be an expert, but learn enough so you know where to look and how to make smart decisions. Recruit a mentor and commit to attending workshops and/or reading some of the great financial books. Local colleges are a good, objective place to start.

Get your money working for you. If you are not investing, you are missing two key ingredients to success: leverage and time. Limit how much you invest in your own business or industry and ensure that your strategy is balanced across asset classes — stocks, bonds, real estate, and money market or cash investments — so that whichever direction the markets turn, you’re able to stick with the plan.

Recent performance has been unnerving, as markets react to weakness in the economy and continued write-downs at financial institutions. The S&P 500 is down almost 15 percent from its record high in October 2007, but to project recent performance forward and make an investment decision based on that assumption is usually a mistake. Continue to focus on the long term and stay the course.

Once you’ve taken care of your financial resolutions, think of all the time and energy you’ll have to focus on your other goals.

Todd Smith, a Certified Financial Planner™, is a financial author, speaker and coach who helps working adults navigate the complex financial landscape to achieve greater economic success and prosperity. 602-485-3896,  [email protected] or www.azmythfinancial.com.

Reprinted from AzNetNews, Volume 27, Number 1, February/March 2008.