Four score and — er, a week ago, I introduced the concept of Conscious Money Intention (CMI): a statement that codifies and solidifies your philosophy and intent toward how you use and manage money in your life. This week, I want to walk you through how to make one for yourself.
Because it will completely change how you approach every aspect of your life that has to do with money. See, I firmly believe that the way personal finance is taught these days just sucks — and mostly doesn’t make sense for many people. You have to understand how you will approach money if you want it to do your bidding.
1. Document what is important to you.
Here’s the thing: my money goals aren’t going to look anything like your money goals — and that’s OK! In fact, it’s essential. That’s why the traditional personal finance advice that gives a lot of rules about how much you should be saving and how much you should spend on what, is pretty sucky. It’s based on an assumption that everyone is a common denominator when it comes to money. But that’s absolutely not true. One person wants to pay down their debt completely so that she can retire at 40; another is OK carrying some debt if it means she can go back to school and pursue that career she’s always dreamed of; and a third isn’t really concerned about her debt as long as she can comfortably travel the world for the next three months. Giving those three imaginary ladies the same one-size-fits-all money goals just doesn’t make sense.
Take some time and decide what your goals are when it comes to money. These could be real-world goals like paying off debt or buying a house, or they can be values or qualities like security or generosity. And don’t let anybody else — your parents, your partner, the last personal finance book you read — dictate what your goals should be. Your goals are your goals.Don’t let anybody else — your parents, your partner, the last personal finance book you read — dictate what your goals should be. Your goals are your goals. Click To Tweet
2. What does the execution of that look like with your money?
If you want to be more intentional with your money, you have to decide how you’re feeling about how you’re spending it now.
- What makes you feel good about your spending habits?
- What makes you feel bad or guilty?
- What can you directly link to an execution of your highest values and what can you see yourself doing that…just ISN’T your highest value?
If, for example, you have a real-world goal of paying down your debt, you might look at identifying places where you’re overspending that you can eliminate and put towards debt.
I love Amazon Pantry. Because I have such a tiny trunk on my Mini Cooper, it’s hard to get bulk items like paper towels, toilet paper and kitty litter in there with the rest of the groceries. So, I order them from Amazon Pantry and have them delivered. Problem is, Amazon really, really wants you to fill up your whole box, so you start hunting around, buying smaller items (shampoo, dish cleaner) to fill up your box.
I realized that this was getting ridiculous when I was doing this several times per month. Sure, I needed some of that stuff, but the third time I bought enough soap to last a year, I realized, this is unnecessary spending. I identified a “buy policy” for myself: I cannot order from Amazon Pantry more than once per month. Is this revolutionary for my finances? Not in any given month. But over a year? That’s a nice chunk of change that I don’t miss spending that I can put toward my goal.
Let’s look at another example. If your goal that you identified in step 1 is to develop more trust around your money, you may have to commit to breaking your worry addiction. How many times do you worry every day? Where does it actually get you? Worrying is a habit that a lot of us have…and it doesn’t help you feel more prepared for the worst happening, it just forces you to brood and focus on it.
Or maybe you want to develop more trust within your family; in that case, you have to commit to transparency without blame. Sure, it’s okay to acknowledge mistakes were made in the past. You can forgive and let go of those. Can you move forward, making decisions and agreements together and stick to them?
If you want more ease with money, you’ve got to integrate habits into your daily and weekly life. Can you imagine if I told someone I wanted to get more comfortable around snakes that the process would NOT involve being around snakes more regularly and handling them? :o)
You CMI is the real-world execution of your philosophy.
3. Honor your values.
Once you identify your values and what that looks like in terms of behaviors, then you need to honor them. If something is important to you, you make time for it. Is it important for you to get better and better with your money? To feel more at ease and confident? Have you created space in your calendar to honor your commitment and declaration? What will you be doing with that time?
For example, I have a conscious health intention that nothing is more important than consistent action. My mantra: I am always improving. What do I do to honor those things?
- I plan healthy meals
- I schedule time to work out
- I schedule time to shop for healthy food and prep meals
- I track my macros and workouts
- I say NO to things that interfere with my healthy choices
And so on. What steps can you take to honor your values around money? List them out, put them in your calendar, and get an accountability buddy if you need to!
4. Plan to fail.
Wait, say WHAT??
Whenever we’re trying to adopt a new habit — whether it’s a new workout routine or a new budget — there are going to be slip-ups. The key is not letting one mistake derail all your efforts. In order to get past that “all or nothing” thinking (i.e.: I bought a new dress today when that wasn’t in my budget, so I’ve already messed up so I might as well buy the shoes to go with it…), we need to plan ahead for what we’ll do when we encounter a mistake or failure.
So, imagine it. What’s likely to trip you up? When are you likely to be tempted by old ways of thinking or acting? For example, let’s say you are trying to spend less, and you know that whenever you go out for happy hour with your girlfriends, you end up racking up a huge tab. You don’t want to do that anymore. What will you do when they invite you out for drinks? Maybe you can say no thank you, but in all likelihood, you will want to accept the invitation.
So how will you handle it? Maybe you’ll have a “buy policy” of only two drinks; maybe you’ll take out a certain amount of cash and only use that for your happy hour purchases. Maybe you could even suggest a different activity that won’t be so tempting. If you think about the pitfalls ahead of time, you’re much less likely to fall into them and not be able to get out.
5. Create feedback loops.
Finally, how will you know whether or not you’ve succeeded? I suggest making a date with yourself — a quick weekly 15- to 30-minute session — to check in to see how things are going. Review your CMI, your values, and your execution steps. How well did you do with execution?
Remember, this isn’t about compare and despair. The point of this exercise is not to beat yourself up if you didn’t live up to your own expectations. Rather, the point is to look objectively at the progress you’re making and how to improve.
Let’s say you wanted to track all your spending for the month but stopped doing it around day 15. Rather than beating yourself up, ask yourself: why did you stop? Was it too time consuming? Too tedious? Or were there emotional issues coming up around it? If you can identify the misstep, you can go back to step 4 and think about how you can handle it in the future. Even if you’re doing well, you need these regular check-ins with yourself to make sure you stay on track. This is the best way to change your results toward your money over time.