Financial House Foundations - heathermarieschwarm.com

Financial House Foundations

Money Mindset and Relationships

January 12, 2021

With a Huff and a Puff,  Will Your Financial House Fall Down?  Start the New Year Building a Solid Foundation

Forget all your financial flops and slip-ups of the past!  It’s a new year and that means a fresh start!   

Goodness, after the crazy and tumultuous year that 2020 was for most people, it’s not surprising that we’re looking to 2021 to bring a much needed breath of fresh air, renewed happiness and yes, some prosperity.

But, here’s the rub.   2021 isn’t going to just magically turn into your best year, financial or otherwise, no matter how much wishing, hoping, and intention setting you do.  You have a big part to play in how the year will unfold.  You must take action.  You must build a solid foundation.  

And that foundation starts with the fundamentals of getting your financial house in order.   You see, finances are the #1 stressor in people’s lives.  Whether you love it, hate it, avoid it or embrace it, money influences how you feel, what you do, and how you live.  Take money stress out of the equation, and you’re free to focus on what really matters…creating a wizbang of a wonderful year (even if the proverbial “wolf” comes to town)! 

But how do you build a foundation that will last?  

Brick by brick (yes, pig #3 had it right)!

Fundamental Brick 1 – Forgive and Forget

Before you can truly start to thrive financially, you must forgive yourself for your financial mistakes of the past.   Newsflash, EVERYONE, and I mean everyone, has skeletons in their money closet.  And, by holding on to past mistakes, you can’t effectively move forward.

Don’t underestimate the power of forgiveness.  Through the act of forgiving, you enable your mind to release the negative emotion (guilt, shame, anger) attached to the memory.  Emotions drive actions and create behaviors.  By changing the emotion, you can change the behavior and instead make new and different choices around money.

A great way to do a mental purging is by using the ancient Hawaiian practice of Ho’oponopono.  It consists of four phrases that are repeated until you feel at peace with the memory (to learn more about how to use  Ho’oponopono, check out our blog post here).  The phrases are:  I’m sorryPlease forgive meThank youI love you.  

Fundamental Brick 2 – Out With The Old

Let’s continue the purging party and clean up some of those old money habits and beliefs that are no longer serving you.   Did you know that up to 90% of your behaviors are either habituated (habit driven) or conditioned (tied to an emotion or feeling about something)?  As the saying goes,  we are what we repeatedly do.  Without tossing out these old behaviors and breaking the connection to certain triggers, it will be tough to move financially forward.

First step to changing anything is becoming aware of it.  For the next week, analyze your behaviors and reactions around money.  Every time there is a “money event,” such as paying a bill, buying groceries, receiving a check, putting something on a credit card, analyze your behavior and any emotions you feel.

Do you put your bills in a drawer and ignore them?  Do you avoid talking about money with your partner? Do you feel stress when you look at your email for fear of another NSF notice?  Do you know the balance in your bank account or just hold out your debit card and pray it goes through?  

Once you’ve identified your behaviors about money, dig deep and try to understand WHY you feel and act the way you do.  Once you become aware of the behaviors and emotions, try to identify the trigger that sets off the cycle.  Do you shop when you’re bored or feeling lonely?  Do you avoid talking about money because your parents always fought about it?  Once you identify the root cause you can take the steps to change the connection by intentionally choosing a different response.  

Fundamental Brick 3 – In With The New

Now that you’ve cleared your mental clutter around money and have a nice, clean slate, it’s time to set your sights on your brighter financial future.  What does it look like?  How do you want to feel?  What do you want to be able to do?  What do you need?  How do you want to live?  Where will you spend your time?  Brainstorm all of the things that you want to experience and have in 2021.  

Once you’re done, transform your top priorities into actual goals for the year.  This step is critical as it gives your brain something tangible to work towards.  Write these goals down every day so you remain focused and motivated (you can download our free goal setting framework here).  As you achieve your goals, your foundation becomes stronger and stronger.

A word to the wise – you simply can’t get to your destination without defining what it is.  So, if you’re serious about making 2021 an amazing year, you need to understand what “amazing” looks like.  Once you do and decide to go after it, your brain shifts into high gear to help you find ways to get it.  

Fundamental Brick 4 – Take A Step Forward

There is one critical ingredient you need to reach your financial (or any) goals, and that is taking action.  This is where a lot of people get stuck.  Either they spend their time hoping for something to happen but don’t do anything to make it happen, or they get overwhelmed by the magnitude of what they want to do and get frozen in non-action.  Either way, the end result is that they stay stuck where they are.

The best way to keep moving is by taking at least one small action each day that gets you closer to achieving your goals.  Your brain is hard wired for immediate gratification and can lose interest quickly.  Setting smaller goals is a great way to keep your brain engaged and your motivation up.  

You see, every time you achieve a goal, your brain gets a dose of dopamine (happy sauce).  The motivation center of your brain is stimulated as your brain anticipates it’s next dose.  By creating a path of smaller, achievable goals, your brain will remain engaged and you’ll be more likely to achieve even your biggest goals.  

Trick – You can double the dopamine effect by creating a reward system for goals achieved.  Use a visual reminder of the progress you’ve made, like a star chart or a dollar jar, and you’ll get an extra boost of motivation every time you look at it!

Fundamental Brick 5 – Progress Check

You can’t manage what you don’t measure.  Set up a system now where you force awareness of your progress and your opportunities.  Check in on how you feel regularly.   Make sure none of your old beliefs or habits are creeping back in and sabotaging your progress.  Remember, awareness is the key to change.  If you find you’re falling back into your old ways, simply acknowledge that you don’t want to go in that direction and choose again.   You can always choose again.

Another measuring stick is to monitor your bank account.  This is a great way to keep track of your financial habits.  Numbers tell a story.  Make sure  you’re writing the story you want to write.  By simply checking your account 1x per day (or even 1x per week to start), you’ll not only catch your bad habits and be able to adjust real time, you’ll  feel more in control because you know where you stand (trust me, it’s usually better than you think).

Lastly, measure how you’re progressing towards your bigger goals.  Achieving goals, financial or otherwise, takes consistent focus.  By checking in regularly and recognizing how far you’ve come (NOT how much further you need to go), you will keep your brain engaged and working hard to help you find ways to achieve what you want to achieve.

By setting yourself up mentally and creating action and momentum around your goals, you will create a solid foundation upon which your financial house can be built.  One that not even the biggest, baddest wolf can blow down.  You’ll find the only thing knocking at your door will be your success (and I suggest you let it in!).

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