The State of Your Personal Economy

Although much of what happens with the national economy seems outside of our individual influence, what happens in our own household and personal economy is something we do have control over. Remember these 5 tips for keeping your personal economy strong.

 

1. No matter your goals, you must know the current state of your personal economy.

My father always told me, a map does you no good unless you know where you are starting and where you want to go. Many people hesitate to take a deep dive into their finances because they are afraid of what they will find. I can tell you from years of working with individuals and entrepreneurs that once you discover (or face) where you are…it is actually empowering and motivating for creating change. You cannot change what you haven’t measured- so start today to determine your current financial health. Gather your bank and credit card statements to begin getting a picture of the current state of your personal economy.

2. Habits create results.

Many people focus on the end result or the desired outcome for their financial goals. This is critically important. However, a goal without a plan is difficult to reach. This is why setting SMART goals (Specific, Measurable, Attainable, Realistic, Time Bound) is so important. You know your goal is Attainable and Realistic when you’ve created the steps to how you will get there by your desired time line. It is the action we take toward our goals that ultimately determines our success in reaching them. Ask yourself, “What action can I take today to benefit my personal economy.” Make a commitment to spend less or save more. If you have investments, look to see if you are maximizing your opportunity to increase their value or create greater cash flow.

3. Who you spend time with shows up in your financial statements.

You have probably heard the phrase, Your Network determines Your Net Worth. There is no doubt that the people we spend the most time with have influence in our lives. For many, the people we hang out with influences the daily habits that we engage in. If your goal is to spend less on eating out so you have more to invest, but your immediate circle plans to meet for dinner and drinks 3 times a week- that habit is not in support of your goal. This doesn’t mean drop all of your friends and family, it just means that you may need to be more thoughtful about what activities you do with them to support strengthening your personal economy. And the best benefit you can give your wallet is to find people who have similar financial values and goals to yours.

4. Spending plans empower your personal economy.

It is no surprise that many people don’t create budgets because there is a negative connotation and emotion associated with it. Budget is synonymous with sacrifice in many people’s minds. I don’t suggest budgeting but instead recommend that you create a Spending Plan. Okay, are they the same thing? Yes. But it will be easier for you to create and stick to a plan for your money rather than focusing on what you may have to sacrifice. A little delayed gratification now… becomes a huge sense of accomplishment when you see the results in your personal economy (bank and credit card statements).

5. You don’t have to figure it out on your own.

Getting control of and growing your personal economy can be intimidating. Without required and rigorous training at school most people are not taught this critical life skill. Sadly, this is more the rule than the exception. Seek out resources and tools that will support you. Look for online groups and community events that provide education. Be sure to do your due diligence so you know you are getting credible information and then translate that information into action steps you can take. This is not about making sweeping changes all at once. It is about finding one thing you can do now to improve your personal economy.

The Take Away

No matter what time of the year- every day is an opportunity to start new. If you haven’t taken a look at your own financial health and set goals recently- there is no better time do so…than NOW. Take one simple step today and commit to that step in support of reaching your goals. I am always here to support you in creating a strong personal economy!