If you read last week’s post, you know that we are focusing on the five strategies that help determine how successful you are going to be with your wealth-building focus. Just to refresh your memory, the five strategic areas are:
- Environment/Self Management
You can get the overview of all five here, but today we will focus on ENGAGEMENT and GOVERNANCE.
To be financially successful, you have to be engaged… this means that you have to have a reasonable interest in AND confidence that YOU control and affect results. Engagement also means that you’re motivated.
In financial planning, I find that the more specific people can be, in linking purpose to their money, the more engaged they become. It’s not *just* about some cookie-cutter understanding of being on track for retirement; it’s feeling on track for retirement but also knowing you’re free to take awesome vacations or fix up your house without compromising your vision. And if you’re in a long-term relationship, it’s also about engaging both parties so you’re supporting each other with all of these different short-term and long-term goals.
Questions To Assess Engagement
- How often do you think about your money?
- How often do you set aside time to review different elements of your financial life?
- How motivated are you around your specific financial goals?
- To what extent do you believe your money is serving your goals?
- To what extent do you believe you’re empowered to manage your money effectively?
How To Help Engagement
The best way to become more engaged in your finances is to block out time to pay attention to it. (This is going to be a recurring theme, watch out). Block out time to think about your money… I like to sit somewhere comfortable and just work on my vision. I use the Notepad function on my iPhone to think about:
Is there a “money magical moment” where if I were to wake up tomorrow and this one thing was changed, what would that be?
Now assess: how is your money currently serving this thought or idea? What can you do to move toward that vision?In financial planning, I find that the more specific people can be, in linking purpose to their money, the more engaged they become. Click To Tweet
To be financially successful, you need a process to manage AND INTERPRET data. This isn’t only about keeping statements organized or filing stuff in a timely manner – that is valuable, absolutely! But that is the historical data. Governance and accountability are also about knowing what your performance indicators are. What behaviors contribute to financial success? On an ongoing basis, what are the numbers that help determine if you’re moving toward or away from your financial vision?
- How well do you know your cash flow?
- How organized are you around being able to access the financial data?
- To what extent can you use your financial data to make decisions?
- To what extent do you understand the actual cost benefits for different short-term and long-term goals?
- How often do you defer decision-making because of a lack of information?
How To Help Governance
The best way to become accountable to your money is–you guessed it– to block out time to pay attention to it. Do you have a process to review:
- Cash Levels?
- Major Purchases?
- Financial implications of life changes?
It doesn’t need to be super intensive or revolutionary – just a way to gain more clarity. And by the way, we can help with some ideas, wherever your challenge might be.