As you know, this is a personal finance blog. My goal is to teach and coach on the aspect of managing and winning with your money.
Have you ever stopped to think about why it’s called personal finance? I reflected on that question a little bit the past couple of days. I believe that it is called personal finance because the main ingredient is very personal: it’s you.
If you are not an active participant in the management of your money, you won’t be able to achieve victory. It’s that simple. You can’t be on the sidelines waiting for something to happen. You have to get in the game.
More information won’t do the trick. I heard a preacher say once that the crew of the Titanic had plenty of information about what they were facing and it still sunk.
We have to be able translate new information into action. So let me ask a few questions today to get us thinking about how we become intentional about our personal finances.
1. What are you trying to do with money?
This is your starting point and it all depends on where you are today. But you do need to have some goals to guide your efforts.
For example, if you are simply trying to get a handle on your spending, you need to make the time to develop the habit of living on a monthly budget.
If you are drowning in debt, you have to decide if you are sick and tired of paying interest to the banks with nothing to show for it. Maybe it’s time get a plan to get out of debt for good.
Maybe, one of your goals is to give generously. It’s hard to help others if you are struggling or just getting by with money.
Whatever your goals are, you need to take action now.
2. What’s happening with your money?
As I mentioned above, personal finance it’s all about you. And this means that you have to start paying attention to what’s happening your money.
And you need to know where you are with your money today as a starting point. How would you answer these questions?
- What is your take home income is every month?
- Do you balance your checking account every month?
- Do you have a good handle on what your bills are each month? Are the bills paid on time?
- How much debt you have?
- Have you checked your credit report lately?
- Could you calculate your net worth?
When you decide to take control of your money, you will be able to generate a picture of your financial situation with great ease.
3. Who’s counting on you?
This question goes to the motivation for winning with money. You see, money is just a tool. It can be managed for your good and the good of others, or mismanaged to your ruin.
If you have a family that depends on you, you need to take charge of your finances. If you are married, you and your spouse must work together on your money.
You need to think about the legacy you will leave behind for your children and their children.
And if you don’t have children, there are still plenty of people that could be blessed because you decided to get control of your money. That’s the real purpose of wealth.
It’s called personal finance because it’s all about you. What will you do about it?
“The key factor that will determine your financial future is not the economy; the key factor is your philosophy.”
This post is also available in: Spanish