Overcoming financial indecision and procrastination
We often act like we have endless time, but life can change in an instant, and every delay in taking control of your finances is a risk you can't afford.
Don't put off your financial goals for tomorrow; that's financial suicide and can be the biggest money mistake of all.
This article will show you how to take back control.
When it comes to finances, people are often overwhelmed by information and options.
They then interpret their confusion as a need for more information. Action is replaced with procrastination because every new piece of information simply multiplies that overwhelming feeling.
Justification as to why this newfound piece of information won’t work for them becomes the norm.
A classic example of this is someone wanting to build an emergency fund who comes across some well-intended advice to have an emergency fund equivalent to 3 months income.
Simple maths and a quick glimpse at how much they currently save each week tells them it’s unachievable, so they never start.
Even though logic might say to just get started, the goal seems out of reach. Three months income is 25% of someone’s annual income, that’s a huge chunk of money.
There is no ‘One size fits all’ when it comes to personal finances and that’s why engaging with a financial coach pays off big time.
Until you gain clarity, it is very difficult to define the right solutions to implement that will work for you personally and also understand how to maintain momentum to stay on track and navigate any challenges along the journey.
As an example, I will use the situation I mentioned previously about someone wanting to build an emergency fund to highlight the 4 key steps for gaining clarity and getting started.
4 Key Steps To Getting Started
1. Identify the problem.
This helps you define the ‘Why’ for the financial objective you want to pursue.
E.G. I want to build an emergency fund because previous experiences of dealing with unexpected expenses have left me stressed and often resulted in me borrowing money then struggling with the ongoing repayments.
2. Kit out your toolbox.
Start asking yourself questions and collecting ideas or tips you have heard about in the past so you have a selection of tools that you can next review to see which ones would work best for you to get the job done.
Examples:
- How much could I realistically save from every pay?
- Do I have items sitting around collecting dust that I could sell to build up my emergency fund faster?
- Are there budgeting/spending strategies I could use freeing up extra money for my emergency fund?
The objective at this stage is not about identifying ‘how much’ but ‘how’. This step is about determining what actual steps you will implement to get yourself started.
You are focusing on a solution specific to your circumstances that will help you achieve your objective rather than someone else’s opinion on how much you should have or their ‘Why’.
3. Implement your solution.
With clarity now about what it is you can do, you are best equipped to get started. There is no excuse not to because you know both why it is important to you and also what steps you can take to achieve it.
If you are setting yourself a specific goal amount, this is the point where you can now bring some maths into the equation to start tracking your progress.
E.G. I want to establish an emergency fund of $5,000
I can raise at least $700 from selling off a few items and I will also put aside my next 3 months commission directly to this account instead of spending it. That’s another $1,500 so it leaves me $2,800 to save. By saving $107 every week I will achieve my goal in 6 months’ time.
The objective here is to determine what you will implement that will help you achieve your desired result.
Side Note: Personally, I don’t have a ceiling on my emergency fund and there is an important reason for that, I will keep that for another day.
4. Manage the momentum.
Ensuring you achieve your objective now comes down to the final crucial step of accountability. Self-accountability is the hardest of all so find an accountability partner.
Someone who you regularly check in with to review your progress, help work through any challenges and motivate you to stay the course.
This step has the added benefit of helping you build disciplines that can be carried through to other financial goals and objectives you may embark on in the future.
'Clarity leads to decisions, decisions lead to actions, actions leads to results, results lead to confidence'
If you would like to explore how a financial coach can help you fast track your progress towards identifying and implementing the right steps for you to reach your financial goals, schedule a Free Exploration call and check out if we are a good fit.
The right support doesn’t need to be an expensive investment with some clients getting the clarity and support they need for less than an evening out enjoying a good meal and drinks.
It’s an investment in you and your future worth making.
Disclaimer:
The information presented in this article is intended for general educational purposes only and does not constitute financial advice. While every effort has been made to ensure accuracy, ReachUp and its authors make no representation or warranty regarding the completeness, reliability, or suitability of the information for your personal circumstances.
Loans, mortgages, and financial regulations in New Zealand are subject to change, and the content here may not reflect the most current legal or market developments. You are encouraged to seek advice from a qualified, authorised financial adviser, mortgage broker, or lender who can assess your specific financial situation, goals, and risk tolerance before making any decisions.
ReachUp assumes no responsibility for any losses incurred as a result of using or relying on the content of this article.