As mentioned in my last blog, these behaviors come from Sarah Fallaw of Data Points. She created a Household Cash Job Description, which is a simple, brilliant way of defining specific money behaviors so we can stay focused on what counts. Financial literacy is part of it, but not all of it, which explains why many people in financial services don’t manage their money particularly well either. Ever heard of the man who makes $2 million a year and wants to retire by 35? He has one small challenge – he spends $3 million a year. Yep. Believe it. We all know one.
Final 5 Good Household Cash Behaviors
1. Responsibility/Locus of Control:
“Do you think you are responsible for your financial outcomes in the first place?” If you consistently blame others for your predicament, you are not taking responsibility. CHANGE: Own It.
Do you have the ability to manage your emotions? Are your everyday money behaviors driven by a plan or by how you’re feeling in the moment? CHANGE: Have a plan and try to stick to it. Start small, like a grocery list.
This means having a sense of the magnitude of numbers, the ability to use numbers in real-life situations, and estimating costs. If you understand that 50% off a $5 item is only $2.50 versus 1% off a $20,000 item is $200, this is an example of numeracy. You won’t respond to a big %; you’ll understand the actual dollars. CHANGE: Math is hard to learn overnight. But you can have the calculator app on the front page of your smartphone.
The confidence that you have been educated in financial literacy and have the tools to make a good decision is where you want to be. Over confidence leads to risk-taking. CHANGE: Confidence can be built with time. Learn from friends, and remember your mistakes. It will keep you on the right side of over confidence.
5. Time & Effort Spent Planning:
Do you have goals for yourself and your family? Do you take time to think about them and right them down? Goals are the Opportunity Cost every time you ask yourself, do I spent impulsively, or save for my goal? CHANGE: Plan 1/2 hour every week or two to go through your spending and saving. Start with small goals, such as your next vacation or new car. Build up to longer term goals when you have the time, energy, and help to think about them.
Finding a Plan B After You’ve Already Retired
Measuring Behavior for Better Hires
7 Strategies For Leaders Not To Burn Bridges
Where Self-Promotion Is Important for Introverts
10 Money Truisms to Take to Heart
Career Transformation Starts With Four Switch-Points of Change
How to Educate your Children about Financial Management
The Lessons I Learned from Falling on My Face
11 Financial Questions with Uncommon Answers
Consumer Price Index Ticks Up
Global13 hours ago
The Pool of Publicly Traded Stocks Is Shrinking: What Investors Can Do
Financial Podcasts13 hours ago
Underneath the Explosion in Passive Investing and ETF’s
Brand Strategy13 hours ago
Winning in a Congested Marketplace
Development2 days ago
Changing Clients Pre-Conceived Notions About Market Volatility
Public Relations2 days ago
Recipes for Social Media Success in Financial Services
Development2 days ago
A 10-Point Exercise for Advisors to Find Your Best Business Life
Public Relations3 days ago
Social Media Is Changing: What It Means for Your Content Strategy
Leadership3 days ago
What CEOs Can Teach Us About Time Management