You probably have heard that you need to create a budget and stick to it. This is absolutely true and in future articles, I will lay out more of the foundations behind creating a successful budget. But, counter to most, that's not where I recommend people to start. In fact, I recommend looking back in time instead of immediately diving in and planning for the future. Reflecting and realizing where you came from, will give you all sorts of valuable information. The reflection process can help you reprioritize goals, identify weaker areas in your financial plan, and help you avoid costly mistakes in the future. As most people will skip this step, they will continue to fall prey into all the crazy financial traps out there. Don't let this be you! At first, reflecting may seem like a very difficult task. But over time, and with consistent practice, it will become easier and the breakthroughs all the more rewarding.
My two cents: Make a habit of financially reflecting. I recommend setting aside 30 minutes to an hour each month to reflect and try and answer the following questions. If you have a partner who's finances are co-mingled with yours, I recommend doing the reflection by yourself first and then sharing your thoughts. One other trick I recommend is to leverage the power of habit stacking. For me, I really enjoy doing the monthly reflection with my favorite cup of coffee and listening to my favorite music playlist. Basically, 'habit stacking' is taking an existing habit that you actually enjoy (like coffee) and adding to it (like financially reflecting).
To help get you started, here are some questions. Just remember, these are prompt questions. You don't have to answer all of these questions, in order, and for exactly 30 minutes. There's no magical formula. The key is to just take the time (every month) to reflect and start making it habit. The more you do it, the more comfortable you will begin to feel. Allow yourself the freedom, to just write, draw, scribble, type or any combo of the above. And remember, this will not be graded and doesn't need to be shared. So, be honest with yourself.
What went right?
What didn't go well? What areas could you improve in?
What areas do you want to learn more about?
Without looking at your bank statements, what areas did you spend the most amount of money? Why? Did spending this money bring you joy? Did it stress you out?
Without looking at your bank statements, what areas did you spend the least amount of money? Why?
If you were to start the month over, would you spend your money the same way? Why or why not?
Where did you feel pressure to make an impulse buy or decision?
What financial situation(s) made you feel scared, anxious, and/or stressed?
What financial situation(s) made you feel empowered, happy, relieved?
I'd love to hear from you! Which financial topics are you interested in learning more about? Email me at jslimitedgroup@outlook.com, and I’ll see if I can write an article on it.
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