Your Finances are not a "fix it and forget it" kinda thingMar 16, 2023
There is a misconception amongst the general population that you can "fix" your finances and then forget about them.
Perhaps this looks like, finally getting on a budget and figuring out a system to actually stay on budget and out of debt. Or maybe this is, automating your investing contributions so that they happen monthly (this is awesome by the way, and really contributes to growth). Or maybe it's finally setting up your kids RESP account, so that you can start planning for their future education. Or creating a plan to get out of debt, and stay out of it.
Whatever it is, these are all awesome things. They are pieces to the puzzle of our personal finances. Remember though, like anything else that you may start learning about - you only know, what you know.
If you start working with a coach or a financial planner, or reading finance books, things will be uncovered that you had no idea existed or were relevant. Our personal finances go much deeper than just learning to invest and budgeting. There are other considerations like:
- Tax planning
- Insurance needs
- Estate planning
- Retirement Annuities
- Emergency Funds
- ....and the list goes on!
And guess what? Your financial landscape is going to change over time!! Possibly annually. There are so many events and things that happen that impact our finances such as:
Marriages. Divorce. Having children. Changing jobs. Losing jobs. Changing career paths. Promotions. Moving. Planning for retirement.
When I think about how much I continue to tinker and tweak my financial landscape, it's constant. I do recognize that I may do it more than the average person though!
Even something as simple as the credit cards that you carry. Over time, these may change. I'll give you an example: as your spending habits change, the right credit card might change. When I moved to Africa and away from Canada, I realized that carrying a Amex was completely pointless. Plus, I knew that if I was going to use a card overseas, I needed to get a card that didn't charge foreign exchange fees (of 2.5%) for every transaction that wasn't in Canadian dollars (which would be most!). So I changed all my credit cards.
My investments have changed drastically over the past 10 years. What started as a bunch of expensive mutual funds, morphed into individual stocks. Then at some point, I got really busy in my career and didn't think I could manage the day to day - so I moved things to a Robo-advisor for awhile. Now I'm back to managing it myself mostly using ETFs and some individual stocks. Plus, I've added real estate and private lending to my portfolio.
I guess what i'm trying to say is - if you're in the process of learning and working on your money habits and understanding the financial landscape so you can stretch your money the absolute furthest it can go (which I assume you are, if you're reading this), personal finances are not a one and done solution.
Commit to yourself that you are going to continue to care for, learn about, and optimize your money from here on out!
The commitment initially might be bigger as you get some things in place, but over time you can focus less, but always have in the back of your mind.....does anything need to change? Are any of my money solutions outdated? Should I be adjusting anything? Is this the right product for me still? You get the picture.
Because the thing that makes the biggest impact with our money - good or bad - is time.
Imagine money not being invested, and the lost returns. Or costly bank accounts. Or underutilized expensive credit cards. Or costly debts. Or costly investment products eroding our annual returns. You get the idea. All of these things, left unattended are moving us in the wrong direction financially, and costing us money.
Things change, constantly. It is the one thing we can count in. So start flexing that muscle in your life when things start to shift:
- Check in with your finances and the impacts these changes may have.
- Get into a practice of reviewing your accounts regularly to make sure they are still relevant, doing what they are supposed to do etc.
- Have a monthly money date to review and assess: spending, net worth progress, debt repayments, progress towards goals
- When things happen, ask yourself - how does this impact other areas of my life?
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Much love, gratitude and money xx