Fall in Love With Your Finances

A new year brings many thoughts - a new beginning, a fresh start, a new perspective. For some, the new year brings about thoughts of regrets about how the previous year ended and the debt accumulated during the holidays. Now is not the time to bury your head in the sand and get ostrich syndrome. It's time to fall back (and stay) in love with your finances.

In order to fall in love with your finances, you must get to know them. Does the thought of looking at your bank account and spending habits make you cringe? Do the words budget, financial planning, saving, investing, estate planning and net worth sound boring, restrictive or make you nervous? Do you get excited about your finances or is it something you'll get to "one day?"

Guess what, they don't have to be a sore subject. Getting good with finances and having financial literacy isn't just for the wealthy, managing money is for everyone.

Change your mindset. It all starts with you. What is your mindset about money? What messages did you learn about money growing up? If you lived in a home where money was abundant and freely given, your current money perspective may be different from someone who witnessed fights, arguments, tears and strife when the subject of money rose.

Does the word money bring up negative connotations? Does it make you sick to the stomach? What is your current financial situation? Do you believe that money is hard to earn and keep? Do you think that you will never get out of your current situation? Our thoughts and words are powerful and shape our world. There are many successful people who grew up in extreme poverty. You may ask how did they do that? They had to work on changing their mindset, working hard, surrounding themselves with likeminded people and getting financial professionals to assist them with their finances.

Know where you currently are. Gather all of your financial statements - bank, credit card, life insurance, investment accounts, outstanding loan balances, etc. Then, look at them carefully. Determine how and the amount of money that comes into your home. Next, calculate your monthly expenses. Starting with your bank statement, identify which items were needs, wants, bank fees, late fees, etc. If you notice a pattern of late fees, do you know when all of your bills are due? It may be helpful to grab a calendar and pen to write them down. Next, calculate the monthly balance due for each bill. Subtract these numbers from your monthly income. If you came up with a negative number, do not be ashamed. Look at your bank and credit card statements to see exactly where your money is going. It may be useful to highlight items such as late fees, overdraft fees, non-emergency expenses (dining out, coffee, subscriptions, etc.). Calculate these expenses. If you routinely pay your bills late and incur late fees, you are paying more than you have to. This habit can negatively impact your credit score.

Take action. Get started on improving your finances today. If the previous exercise showed that you have more month than money, are you willing to do something about it? You may have to have a conversation with your family, friends, and creditors. Some may recommend canceling all your subscriptions, never going out to eat, cooking all of your meals at home all at the same time. These are all great things to do, but if you're not going to stick with it, it will lead to resentment and you will end up in the same financial situation or worse.

Start small. Contact your creditors and let them know you are having difficulty paying your bills. Some companies may allow you to change your payment date, have hardship programs or may defer payments but you must contact them. You do not have to be ashamed or live in anxiety about your finances. Whether you make six figures or managing a shoestring budget, you can take steps to improve your financial situation.

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