177 | The Hardest Part of Managing Your Finances

By and large, lawyers find this step more challenging than any other aspect of managing their finances. The good thing, though, is that this is completely within your control.

In this episode, let’s talk about a few strategies you can implement to start sticking to your plans.

• • the 3 steps to manage your money well
  • why the first 2 steps feel pretty easy for most people
  • 5 strategies to stick to the plans you make for your finances

Hey friend. Welcome back to the show. I hope you’re doing well and having an amazing day so far. Today we are talking about the hardest part of managing your finances well. There are really only three things you need to do to manage your finances well. You need to figure out where your money is going. Now, you need to create a plan for where you want it to go moving forward and then you need to stick to that plan. And by far the hardest part, for most people, the part that most people find challenging is that last part of sticking to the plan. Figuring out where your money is going is pretty easy. You just look at your spending, you will get your accounts, your credit cards, that kind of thing. Creating a plan is pretty easy too. People create budgets all the time because you’re just making decisions about where you want your money to go. But so many lawyers have told me that they create all these budgets, but then the issue comes with sticking to them. They don’t stick to them. That’s where their plans just go off the rails. And that can feel really frustrating. But it’s also a really good thing. The hardest part of managing your finances well is sticking to what you said you’re going to do. So that means it’s something that you can control which means that you can change it. So I wanted to talk today about a few strategies to help you stick to your plan. The first one is something that I talked about all the time which is making sure your plan is realistic in the first place. You want your budget to be a plan that fits your life, not an idealistic version of what you think you should be doing, what you should be spending, what somebody else says you should do. You want it to be realistic for you because when it’s not realistic for you, you’re setting yourself up to not stick to it. So the very first strategy is make sure that your plan is realistic. The next strategy is looking at the plan that you create. As we just talked about making a plan. It’s pretty easy, but if you don’t look at the plan, if you don’t check in with the plan, there’s a very slim chance that you’re actually going to stick to it. So you want to be reviewing your plan against your actual spending periodically to help you stay on track. I teach my clients review their spending at least weekly against their plan. That is enough that you can course correct if you’re getting off track but it’s not so much that it’s adding a lot to your plate each week. The next strategy is kind of related to the first one and it is to keep the reasons behind making your plan top of mind again, you want to make sure that when you’re making your plan, you’re not doing it from a place of what you think you should be doing. Not only do you want to make it realistic, but you want to make it what you want to do. So let’s dive a little bit deeper into what this looks like. Let’s say that your plan is to save X amount of money. It will be a lot easier for you to stick to that plan when you’re doing it for a reason that’s important to you or that’s meaningful to you versus if you are saving because you just think you’re supposed to. I think a lot of us have gotten that advice to save a certain percentage of every check but what is that money for? What’s the reason that you’re saving us money or you know, apply the same thing to whatever other goal you have paying off debt, whatever it is. You want to make sure that you have a reason behind doing it that it’s something that’s meaningful to you. Same thing with creating a budget. It’s not just about writing down some random numbers for these random categories and making that plan. You want to be intentional with how you’re spending your money. And you want to make sure that you’re using it for the things that are important to you, and that you’re allocating that money toward the things that matter. So why do you want to spend this much money in this category and that much money in that category? When the plan is arbitrary and random and whatever else, it’s so much easier to just forget about it. But when you tap into the reasons that you created the plan, it helps you to stay on track with it. It almost reinforces the plan. So when you have a deeper reason behind planning to spend your money in a certain way, or planning to pay off this much debt or planning to save this much money, it makes that plan feel more tangible. There’s a reason for doing it. It’s not just this arbitrary thing that you’re doing for no reason. Then when you’re going throughout the month, you’re better able to stick to your plan because you’ve made a plan for your money that accounts for the things that matter to you and you’re keeping those reasons for that plan Top of Mind Alright, the next strategy is a bit more tactical and it is to move the money that you want to save or pay off debt with out of your checking account. That way you’re not just spending throughout the month and then you look up and you realize that the money for you extra debt payment is gone, or there’s no money left to save. It’s the idea of paying yourself first similar to that. So let’s take care of you and your goals. First. I have my clients move, obviously their savings to their savings account, but also the money that they’re planning to use for an extra debt payment as well. And the reason that we move it to the savings account, and we don’t just go ahead and make the payment is we want to make sure that if something were to come up throughout the course of the month, you are covered that you don’t end up in a bind because you gave this money to chase or Amex or whoever has your credit card or your debt. So by putting it in the savings account, you can access it if you need it, but you’re also protecting it making sure that it doesn’t end up getting accidentally spent and then you’re not able to use it for your goals. So it’s an excellent way to help you stick to your plan and then the final strategy is to incorporate a reward system for your goals. So this means that you are keeping track of the progress that you make with your goals. And once you achieve a goal or you hit a milestone, then you give yourself some sort of reward or treat. That helps your brain to tie the actions that led to you achieving that goal or milestone to something good. So we’re reinforcing that this is a good thing which helps to motivate you to stay on track with your plan. You have something to look forward to once you achieve your goals or you hit your milestones. When you are using the strategy that I want you to make sure you’re being reasonable with it. So don’t pay off $1,000 And then go spend $1,000 Or spend $2,000, right? Make it something that feels like a treat, but that doesn’t take you off track from your goals or keep you from continuing to move forward. Alright, so those are a few strategies to help you stick to the plans you create for your finances. Make sure that the plan is realistic. Make sure you are reviewing your plan. Keep the reasons behind your plan in mind. Move the money that you plan to use for goals like savings for debt payments out of your checking account and implement a reward system to celebrate when you achieve goals or milestones. These are the kinds of things that I teach all of my clients so if you would like personalized support as you work towards sticking to your plans for your finances, come join us in Money Mastery. You can get started at rho thomas.com/join. Alright, that is it for this week’s episode. Thank you so much for listening. And if you haven’t done so already, please subscribe to the show and leave a review. Both of those things help the podcast get pushed out to more people so more lawyers can get this information and start improving their finances and I greatly appreciate your support. As we close out friend, I pray that you take the information you’ve learned here, apply it in your life and open up to the realization that wealth is available to you. As you do that consistently. Week after week. You’ll continue to take steps to regain control of your time build wealth and live the life of freedom and choice you deserve. Talk to you later.