Welcome (back) to our Six Stones series. Our financial adviser, Jordan, is sharing as many tips, ideas and advice for people going through a divorce as a humble blog will allow. He’s staying away from specific financial advice – it’s all general advice over here, be sure to get personal financial advice before doing anything – but we hope you find some useful information in here as you navigate through/out of your divorce.
Time to get started on taking control of money.
The first stone I want to you step over to is the biggest one, right in front of you.
It’s the easiest one to land on, but the hardest one to get comfortable on.
But once you’re comfortable, the next couple of steps become a lot easier.
The First Stone – Money Management
Or, the Budgeting, Banking and Tracking of money as it flows into, and out of, your hands.
Can be boring.
But it is super powerful because the management of your cashflow – the movement of money into, around and out of your life – will dictate your financial trajectory.
It is THE most important section of your financial picture.
And it’s even more important as you come out of your divorce.
Responsibility for your financial security now sits on your shoulders, and managing your money is the fastest way to feel like you’re more in control of what’s going on.
Simple, Not Easy
Getting on top of your cashflow is simple, but that doesn’t mean it’s easy.
The steps are simple:
– Work out where your money’s currently going;
– Work out where you want it to go;
– Set up your banking properly;
– Report, review and repeat.
But it’s not easy, or else we’d all be doing it.
And a big reason why we don’t is because ‘budgeting’ sucks.
The traditional idea of budgeting – track the dollars, mind the cents, focus, focus, focus – is about as enjoyable as those hairs that hang around between your haircut and next shower.
We advisers have also managed to give it a pretty bad name, being seen as the disciplinarian, berating people for their daily coffees and not updating their budget after buying that stamp for a dollar.
The Bad Guys
I’ve been guilty of this, working in the black and white ‘reality’ of the numbers without thinking about the other factors at play.
(The yawning chasm between mathematical and emotional ‘realities’ when it comes to money is a huge topic)
We’ve repeatedly said that budgeting is important and you should do it and watch every dollar and manage it all, every day, for ever and ever.
But we never got anywhere.
Because, well, we were wrong.
And I realised a while back where I’d made a mistake – we shouldn’t be the bad guys (I’d be a terrible bad guy!) and it’s not for us to tell you how to spend your money or what to buy.
We’re not your parents!
Instead, we need to help YOU take control of your money. So that the choices you’re making are conscious, fully informed decisions.
And it’s our job to help you build the context within which you’re making these decisions.
That way you have the information and tools to make more ‘good’ decisions about your money than ‘bad’ ones – and that’s how you make progress!
That’s how you build confidence.
So I shut up about budgets a long time ago.
Now we talk about managing your money – and focus on keeping it simple.
Which is why – after a lot of reading, a lot of experience with our clients and more than a little trial and error – we’ve built our Money Management System.
We’ve set it up so that it’s easy, simple and you’ll get some quick ‘wins’ so you can see you’re making progress right away.
Because it’s no good otherwise.
You’re coming through a time of tremendous uncertainty – I’d hate to inject another cause of anxiety and stress into your life.
The 3 B’s of Money Management
I wish I could say all of the following ideas are fresh off the top of my head, fueled by my brilliance and uniquely wonderful perspective.
But that’d be a total lie.
No, what I’ve done instead is distill the reams of information, models and approaches that I’ve found in my research and experience into build a model that works.
And it works because it’s:
We’re not going to start tracking every coffee you ever buy, or the weekend away, or the extra bout of online shopping you did the other night after a few too many wines with nothing on TV.
Like I said, I’m not your parent.
Instead, we’re going to help you get an idea of where your money’s going at the moment, set up your banking to help regulate the flow of funds and show you a few ways you can keep improving things.
Incremental improvement inspires impressive…results. Nearly hit the whole alliteration…
But the point stands.
It’s the small, gradual steps that you take that will help bring you closer to Confidence.
Our next post is all about working out where your money is currently going – and how you can divide all of your decisions into three buckets.