Welcome to the New Year.
The holidays are over. The holiday parties are over (and if not, bravo for your stamina). You probably ate and drank too much, but about as much as you expected to. This is not your first rodeo.
You probably spent too much as well. But again, that’s what happens every year, right?
If you’re like me, the passive-acceptance in phrases like “it happens every year” contrarily becomes a kind of call-to-action to my ears. How can this year be different?
Paying more attention
Admit it, you could be doing better with your finances. Yes, that whole ugly topic of what’s in your wallet, or rather, what’s not in your wallet.
So whether you make $30,000 a year or $300,000 a year, I challenge you to pay more attention this year.
A year is comprised of twelve months. That means that you have twelve opportunities to discover the secret life of your money.
January has now officially started, but it’s not too late. Remember, you can divide your money into three buckets:
- Income: The amount of money you have coming in. Also known as “take home pay”
- Bills: The amount of money that goes to recurring payments. Rent, mortgage, electric, phone, cable, etc. Is it one or two payments each month? Then it’s a bill.
- Expenses: Everything else you spend money on. Groceries, entertainment, gasoline, all the little stuff that slowly but steadily empties your wallet.
Right now, open a text editor, spreadsheet, or find a piece of paper, and write down these three words. (Leave lots of space on the page if you use paper.)
Now, if you’re a self-starter, or have been reading this site for a long time, you can continue, filling in the different Bills you pay each month, then subtracting them from your total Income, and then moving on to the categories of Expenses. Hopefully, you’ve already done this. (I always try to do this before the month starts, but to be honest it usually gets done a few days after.)
But for everyone else, you can stop here. Leave the file or page in a prominent place. Think about those three words. Keep them in mind as you go through the month spending money. “Ahh, my paycheck; that’s Income.” “I’m paying a Bill now by writing out my rent check.” “Going out to dinner tonight. That’s definitely an Expense.”
Soon enough on this site, we’ll go into more detail about how you can fill in some information to allow you to take control of your finances. It’s actually pretty easy, and requires neither a lot of time or a smartphone app to help you.
But right now, I just want to plant the idea of mindfulness. Notice how it feels when you give, spend, or receive money. Don’t let any transaction happen without noticing it.
I’ve never been too concerned about how much money you make. While I want everyone to make oodles of money, sure, I’m more concerned about what you do with it when you have it.
What I really want is for you to thrive. To not feel held back by constraints that are actually in your control.
Action, not reaction
What do you want to accomplish this year?
Paying attention is in some ways just a reaction. It tells you what’s happening now. (That’s why I’m unimpressed with the online apps that tell you about your spending after the fact. It’s kind of like the exit ramp telling you long you were stuck in traffic.)
So instead, I’d like you to think larger for a minute. What are your goals this year? And how do your finances affect these?
Think about it. If you make $30,000 a year, you have maybe $1,600 coming fall into your hands each month. But that’s almost $20,000 this year alone. What do you want to do with all that? It can’t all be going to Bills and standard Expenses. Are you putting anything away from the future? Do you have any big plans? Now is the time to think about these plans, because once the year starts, you’ll be back in the thick of things, and long-range planning is the first thing to go.
That’s why I love the holidays, or rather, everyone else celebrating holidays I don’t. It gives you a pause, a comma in your year.
No distance can hold us back
Is money holding you back? How would it feel if you no longer had to worry about money? How would it feel if you felt like you had enough? How would it feel if I told you that this is attainable, even by you?
As I never grow tired of saying, every year is a new chance to get things right. Forget what happened last year. The new year starts…
Let’s achieve some great things this year.
But enough about me. What are your plans for this year?
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