Money Monday – Understanding the Past, Planning for the Future
“The journey of a thousand miles begins with one step.” Lao Tzu
Today, I am kicking off a series, alongside my husband, on all things personal finance. My husband is a qualified finance professional who now runs his own consultancy business. As it happens, he is now on a bit of a break from work, which is a blessing in disguise. We are using this time to do many things that we don’t usually get time for (including working out together) as well as delving into our finances. We believe in good stewardship and over the last 13 years of marriage, we have reviewed our finances on a semi-annual basis (more if need be), because things change – jobs, priorities etc. We are halfway through the year which means its time for our review. Over the course of this series, we will be sharing what we do and why, with the hopes that it will be of some assistance to you and your goals.
And on that note, this is a disclaimer – this and future blog posts in this series do not constitute financial advice. It is prudent that you find a qualified adviser who can delve into your personal finances and goals, and can offer you products that suit your individual circumstances. We do not claim that our way is the best way. What we will provide is simple guidelines and resources on how we manage and view financial matters that we hope will be useful to you.
Now that’s out of the way, let’s get started. You will need to get a journal to jot down the answers to these questions and anything else that comes to mind. It is important for you to be brutally honest with yourself through out the entire series. You may make some interesting and maybe shocking discoveries.
This week, we would like you to consider your journey to achieving your financial goals. We would like you to start by thinking about the past and how that has shaped the way you deal with your finances. Things you could think about are:
- What were your parents’ financial habits like? Were they good, not so good? What did they do well and what didn’t work so well?
- How about your spouse’s/partner’s/friends’ financial habits?
- How have they influenced you and the decisions you make regarding your own finances?
- What are your earning, spending, saving and investment behaviours? Are there any patterns you can identify?Are you impulsive or deliberate in your financial decision making?
Now let’s switch gears and think about the future. Let’s dream about possibilities and think about the ideal scenarios.
- What is your ideal financial scenario in 1 year, 3 years, 5 years, 10 years?
- What are the drivers influencing the scenarios you have listed above?
- Where would you like to draw you income from? Have your sources of income increased and diversified (multiple streams of income) or are they from a single source?
- What does your retirement look like?
- If you had all the money you needed right now, what would your life look like?
- With all this in mind, if you were to focus on three things to work to get you from your current financial situation to where you need to be, what would they be?
I’d be grateful if you could share one key thing that has come out of this exercise. Have you had an ‘aha!!’ moment from this self assessment? Feel free to comment below or send me a private message on instagram or on email firstname.lastname@example.org
Also keep an eye out on my instastories where I’ll share what has come out of this exercise for us.
Next week, we will build on this information towards the first step in achieving your financial goals.
Thank you for taking your time to do this.
Until next time