I am SICK of politics and politicians! The media devotes countless hours postulating election outcomes and what they will mean for our country and the world. The answer, in my view, is a whole lot of wasted time and resources. The reason is simple: politicians are interested in getting elected and staying elected, and "leadership" is a distant idealistic notion swept away in the flash and fame. (Imagine having voice recorders in your face twenty four-seven, your every word liable to end up on the front page or become the subject of discussion, dissection and disposition. Heady stuff for anyone of the human persuasion.) Thus, politicians yearn for the drug of attention and the buzz of power. Meanwhile, while they are getting and staying buzzed, nothing gets done! Everyone lines up to defend the castles of their position and do their very best not to tick off anyone of consequence. Thus, there's a great deal of talk-but a lack of action.
What does this have to do with money and life? More than you might suspect. The world of politics is a primer for making lots of noise and getting very little of substance accomplished. In fact, the more a politician does, the more fire they are sure to face. What we have witnessed over the last year, as we slowly escape the clutches of recession, is that markets recover, corporate profits are achieved, companies merge or acquire other companies, consumers spend and, sometimes consumers save. Life goes on. Unaddressed challenges build up from which clever people figure out how they can benefit. Finger-pointing and rhetoric escalate to even greater heights and blame supplants action.
I know, its sounds like I'm talking politics again. But I'm actually talking now about the dynamics of managing finances, especially between couples.
Creating your vision of financial responsibility and financial success is the first step in the process of taking your thoughts to action. After all, nothing happens if your idea remains the sole possession of your brain. Let's unleash all that power into creating something positive that will improve your life. Here are some steps to consider:
1. Consider the goals
2. Research the issues and gain insights
3. Create the action steps and obtain the necessary buy-in
4. Put the plan in place
5. Monitor and test the results
6. Make changes when necessary
Consider the goals:
Perhaps you wish to reduce or eliminate debt or build a nest egg for the future; think about what is most important to you and write it down. (Hint: Unless it's written down, it's just an errant thought.) Create a list of objectives based on your goals, dreams and financial "musts," (that which MUST happen in order for you to feel satisfied).
Research the issues and gain insights:
Who are the stakeholders or interested parties? Your spouse, significant other or even children should be brought into this process (at the level appropriate to their age, knowledge and ability to contribute) in order to broaden the conversation. This allows for varying points of view and opinion. I have met with many clients over the years and invariably, those who grew up in households where money was talked about in louder than hushed tones, where it wasn't treated as the "no-no zone," had a much healthier approach and comfort with the money conversation.
Create the Action Steps and obtain the necessary buy-in:
Once you have raised the topic and asked the questions, it's time to create your action steps-hopefully in cooperation with your partner or other stakeholders. For example, one client, with the help of their eight and twelve year olds, decided to eliminate two of the premium channels from their cable, eliminate their landline, and to make lunch at home instead of buying lunch every day. These savings were directed into College 529 Plans for each child; the end result was that everyone wins.
Put the Plan in Place:
Change can be difficult, even for the most organized, well-intentioned and fired up individuals. Therefore, putting one's thoughts into action can be tricky and can backlash unless everyone is onboard and understands their roles. Taking the example above, if that family consistently orders pay-per-view movies that exceed the cost of the premium channels, nothing has been accomplished. You must think through all the aspects and consider what could go wrong.
In order to feel good about the changes you've made, you must see the results as quickly as possible. If you decide to go on a diet, you will eat celery and lettuce for just so long before you tear into the twinkies, unless you see results. For those looking to eliminate debt, each payment is another step toward your goal. Watch the statement closely: the principal balance reducing and the finance charges lessening each time payment is made. If you are building up a savings or investment account, consider making frequent deposits. Each payment towards your goals adds to your success, tangibly and emotionally.
Make changes when necessary:
"Why do you bang your head against the wall?" Answer: "Because it feels so good when I stop!" OK, so it's a lame joke, but the point is clear. Doing something over and over again that doesn't work is just plain crazy. When you see something that's not working, unlike Congress, fix it-decisively; if you find another way or a better way, incorporate it-decisively!
The mid-term election is upon us. This means the end of the negative ads on TV and the resumptions of name-calling and finger-pointing in the halls of our government. I urge you to make a stand, at home, where it counts most. Let go of the finger-pointing. Don't worry about getting re-elected - you're in this for life. It's time for less talk and more action!