Ask the expert: How can I create positive financial habits?
Money is something many of us can wrap up in emotion. While it should be a simple exchange of value, it’s often more than that. Picking up unhelpful attitudes and beliefs about money, such as viewing yourself as ‘bad’ with money, can lead to poor financial habits.
Your money questions
We speak to leadership and executive coach Jessica Rogers to understand why it’s important for us to feel empowered financially and crucially how we can adjust our mindset.
Why is it important for more of us to feel empowered financially?
When you feel in control of your money, you feel in control of your life; you can make empowered choices. It also sets the tone for how you do business/work. When you charge what you know your product, service, or skill is worth, it takes away any doubt or resentment. Money doesn’t need to be a ‘dirty word’, and you should feel confident enough to have open and honest discussions about it.
Financial empowerment is not just about the financial transactions, it’s also about financial literacy – making good investments, saving, and spending effectively. When we feel financially empowered it leads to good planning and, ultimately, a good level of freedom.
I’ve always considered myself ‘bad with money’. How can I change this mindset?
It’s important to understand your relationship with money, and this is influenced by your early experiences with it. How was money spoken about when you were younger, and what were you taught, directly and indirectly, about money? When you take an honest look at this, it usually gives you a steer as to where your current beliefs about money come from.
Decide how you want to be about money – what does it mean to you? When you get to the root of where your ‘bad with money’ mindset comes from, you can unpick this, and separate the truth from the ‘story’. You can then make some conscious decisions about how you want to be about money, and then take action to change your mindset.
What small steps can I take to get to grips with my finances?
Careful planning is key – start by writing down and tracking your incomings and outgoings. You can do this with a simple excel spreadsheet, or there are various simple software programs you can use. Track and write absolutely everything for a whole month. Do your outgoings exceed your incomings? If so, where can you start to cut back? If not, how/where can you save or re-invest the excess?
Create a clear separation between the money you need to pay essential bills, and the money you need for the ‘extras’. Try to save every month, even if it’s a nominal amount, move it to a separate account – this helps to create positive psychological feelings around your finances. Remember that you control where your money goes, be careful not to let your money control you.
How can coaching help me with my finances?
A coach can help you explore your money mindset to help you develop one that serves you and where you want to be in life, and how you want to view money in that. A coach can also help you to develop effective planning tools and keep you accountable with your financial goals, they will also challenge you to set stretch goals and to meet them. A coach is a very effective financial accountability partner.
Jessica’s top tips for cultivating positive financial habits:
- Save a percentage of all financial incomings. Set up a direct debit so as soon as the money hits your main account that percentage goes to a separate savings account.
- Actively keep track of your weekly outgoing expenses. This helps you identify any unnecessary spending, particularly unproductive direct debits and subscriptions.
- Talk openly about money, and remember that you control your finances – don’t let them control you!