What is intentional money management?
Have you ever taken a moment to stop and think how intentional you are about managing your money? Intentional money management is about making thoughtful and deliberate choices that align with one’s financial goals, values, and long-term vision. It's about taking control of spending, saving, and investing habits, and being mindful of how they impact on an individual’s financial well-being. Managing your finances intentionally means regularly reflecting on your spending habits and financial decisions, and prioritizing what's most important to you. Instead of reacting impulsively to expenses or financial demands, you're proactive in creating a plan that helps you achieve the financial life you desire. A key benefit of intentional money management and possibly the most important one is that it brings clarity and focus to your financial life. When you know what your financial goals are and why they matter, making decisions about how to use your money becomes easier. This sense of direction can lead to a more purposeful and satisfying financial journey. Intentional money management also helps you cut out unnecessary expenses and distractions, allowing you to focus on what truly matters financially. By being mindful of where your money goes, you can prioritize spending on things that bring value and joy, and let go of expenses that don't align with your goals. Another benefit is that it can improve your overall financial well-being and peace of mind. When your spending, saving, and investing align with your values and goals, you'll likely feel more content and confident in your financial decisions. Being in control of your finances can also reduce stress and boost your sense of accomplishment. It can positively impact your relationships as well. When you're clear about your financial priorities and boundaries, you can communicate them more effectively, leading to healthier financial interactions with others. This clarity can also increase your self-confidence and financial independence. It's important to remember that intentional money management isn't about being perfect or never making mistakes. It's about being mindful of your financial choices and adjusting when needed. Living intentionally with your money means avoiding autopilot mode one of the key principles I cover in my book ‘How I fixed my Broken Budget – 7 key principles for successful budgeting’ and staying aware of how your financial decisions affect your life. If you are new to intentional money management start by understanding your current financial expenses and where your money goes then next set clear financial goals and create a plan to achieve them by removing areas of spending that don’t provide you value and will sabotage your goals if they remain part of your spending pattern and habits. Take time to reflect on your financial habits, track your spending, and consider how your financial choices align with your goals. This practice can increase your financial clarity and help you make more informed decisions. I call this monitoring your behaviour not the money In conclusion, intentional money management is about making conscious and deliberate financial choices that align with your values, goals, and vision for your life. It can bring clarity, focus, and financial well-being, as well as healthier relationships and peace of mind. If this resonates with you and seems like the direction you have been looking for but getting started is an obstacle, then consider investing in yourself and completing a ‘Money Mentor Program’ or grab a copy of my book and go it alone. Either way you owe it to yourself to do something. Your future self will thank you for it. Start your journey today towards a healthier and enjoyable financial future.
Is refinancing my mortgage the best decision?
Refinancing your mortgage might seem like a great option but for many people it’s actually not. We all have those hindsight moments in life right, I will never forget that moment for a couple I met just after the GFC. Their hindsight moment was realising that the true cost for them from the previous two decisions to refinance was just shy of $600,000. It’s a costly mistake that anyone can make. This article covers some key questions to ask yourself before you head down the refinance decision so you can avoid costly mistakes and be confident in your choice whether that’s to refinance or stay with your current lender. Here’s five questions worth asking yourself when evaluating if refinancing is the best option for you.
Are finances sucking the life out of you?
Have you secured your oxygen mask? Imagine you're on an airplane, and the flight attendant begins the safety demonstration. Among the instructions, they emphasize the importance of securing your oxygen mask before helping others with theirs. This simple guideline carries a profound lesson applicable beyond air travel—it's also a great metaphor for prioritising your financial health before indulging in non-essential expenses. Much like ensuring your own well-being before helping others during an emergency, managing your finances responsibly sets a strong foundation for long-term stability and financial well-being. Here’s how prioritising financial management mirrors putting on your oxygen mask. Self-Preservation: Securing your oxygen mask assists you to maintain consciousness and functionality in times of risk and uncertainty. Managing your personal finances with a well balanced budget or plan that includes consistently building your savings and controlling or minimizing your debt exposure, ensures your financial well-being in times of risk and uncertainty. Clarity and Focus: Wearing your mask clears your mind to focus on assisting others. Similarly, effective personal money management provides the clarity and peace of mind needed to navigate unexpected expenses or redirecting of money to other areas when situations warrant it. Surviving extreme situations: Putting on your mask gives you the oxygen you need until the pilot can get the plane to an altitude where you can breathe without it. Likewise, a well-managed budget and financial plan provides a safety net, helping you get through extreme situations like medical emergencies, incapacity to earn an income for a period of time or worse. Influences responsible behaviour: When you live a life of prioritising your finances, you set an example for others of what is helping you succeed, much like how demonstrating the oxygen mask procedure for passengers helps them understand the benefits to them if they follow the instructions. This has the potential to influence family members, friends, workmates and others in your life to also adopt healthy financial habits. Assistance to others: Just as securing your mask allows you to assist others without compromising your own safety, managing your finances responsibly ensures you can meet any expenses of supporting others or funding things you think you need to do that are right now most likely seated in a sense of obligation rather than necessity. The Importance of Financial Prioritisation Prioritising financial management before spending on unnecessary items is not about going without but rather about creating for yourself a solid foundation for both financial freedom and security. Here are some key benefits of this approach: Financial Stability: Budgeting and managing finances wisely creates stability for your finances, reducing stress and uncertainty with how much money you have or where it needs to go. Debt Reduction: Prioritising the continual management of your finances will often lead to better opportunities to tackling debts strategically and reduce the amount of debt you have which in turn can save you significant money in interest. Wealth Building: By saving and investing wisely, you build wealth over time. This opens doors for a more comfortable retirement, potential homeownership, funding education for yourself or your children, and other long-term goals. Emergency Management: A well-managed budget includes provisions for emergencies, ensuring you have resources to handle unexpected expenses without resorting to high-interest loans or increasing your mortgage and adding years to your indebtedness. Peace of Mind: Knowing you have control on your finances brings peace of mind and allows you to then turn your focus to other aspects of life without the constant financial stress. In Summary If you are not prioritising financial management and budgeting before indulging in unnecessary expenses, it’s like ignoring the importance of securing your own oxygen mask before assisting others. On a plane, people matter but to help them you need to be positioned to do so effectively and you can’t do that if you run out of oxygen. In life stuff matters too, the nice holiday, the eating out with friends, the gifts you want too lavish on those important to you but if you give all your attention to these things first at the expenses of not having your finances in order, it’s only a matter of time before these distractions suck the life and its opportunities out of you. By adopting this mindset, you not only help safeguard your own financial well-being but also better position yourself to fund the other things in life that bring satisfaction and enjoyment without the stress or risk of your bank account and resources running dry. Maybe today’s a good day to look at whether your oxygen mask is securely fitted.
How your brain helps you save money
Now that’s sounds like a click-bait title if ever I have seen one but don’t disconnect from reading just yet. As a money coach if there is one thing I have come to understand about money, it’s this: It is not about the numbers but how you do money that counts When you start the process of saving money there are several changes that begin to occur in your brain both neurological and psychological. It’s why I love my role as a money coach, it is really satisfying seeing how clients who have never been able to save money are saving money within four weeks. What is even more fascinating is how their thinking and creativity changes so rapidly too. It’s like they have just given their brain a massive jump start. There are several things that change, and I won’t go into them all here but below I have listed the five top benefits I believe occur, both mentally and monetary. Increased sense of achievement Dopamine is a chemical that gets released and commonly associated with reward and pleasure. Saving money regularly and seeing your savings grow is a practical activity which can quickly help you feel good about money, particularly if you haven’t been saving previously. This feeling of achievement releases dopamine and that feel good feeling triggers the subconscious encouragement to keep going. Establishing for yourself the right amount to start saving regularly is important. If you set yourself a savings level too high for your current situation the opposite occurs. The moment you can’t put aside the money, your brain associates this with failure and releases cortisol which contributes to a feeling of disappointment. That’s why you will often hear people say “Just start small with a few dollars a week” Here’s a link to a calculator you can use if you want to work out your achievable minimum savings capacity. Establishment of good habits Every time you add to your savings you are reinforcing a loop in your brain. While it might feel hard at the beginning and need a lot of focus, over time this looping effect is triggering activity in the basal ganglia, the area in your brain that is involved in the development of motor skills and habit formation. Just like anything you do that is new, start working out at the gym, learning to drive, it gets easier over time the more frequently you repeat it. Stress and anxiety levels reduce Remember that hormone I mentioned earlier, cortisol. Research suggests that saving regularly and having a savings buffer reduces the level of cortisol that gets released. The lowering of cortisol and the increase in dopamine and endorphins from saving makes an excellent combination for improving your cognitive abilities and decision making. Making better decisions with your finances and becoming less reactive to financial pressures because of now having a savings buffer then reduces the feelings of stress and anxiety. Like I mentioned earlier, it’s not about how much money you have but how you do money that makes the difference. The impossible becomes possible If you don’t have savings or aren’t contributing to building regular savings, then chances are you don’t have too much expectation or direction for the future. Life is possibly more about existence, getting from one pay-check to the next. Saving money regularly starts to provide direction and opportunities. There is no point saving for the sake of saving but until you get the process into momentum it is impossible to see a brighter future. That idea of owning a home, taking a family vacation or whatever it might look like for you just can’t be seen as reality. Saving causes you to become more mindful of what the future could look like. As you start thinking differently your prefrontal cortex kicks into action which is the part of the brain that works on planning and execution, helps with your decision making process and also starts to make positive changes towards impulsive decisions. For anyone who considers themselves impulsive when it comes to finances, saving money regularly I believe is the key to overcoming this not determination or will power. These days when I coach clients, I refer to this process as ‘Training the brain’ Knowledge becomes action We live in a world of information overload. You can google how to be better with money or any other topic you desire and instantly become drowned in opinion and information. It is only when that knowledge is put into action that change occurs however like I mentioned earlier, you are going to flood you brain with cortisol becoming increasingly disillusioned and demotivated if that knowledge isn’t applicable for your situation and fails. However, if you start saving and allow yourself to go through the process of change, you can avoid that risk as you become more knowledgeable about money, finances, budgeting, investing and planning and increase your financial literacy through learning as you save. Again, your brain actively involved, this time your hippocampus. This is the area responsible for learning and memory and as you retain what you are learning without being impulsive or reactive to your financial situation, you become more discerning about what might be the right action for you to take. I term this as 'Making smarter money decisions' Are you using your brain to it's fullest potential? So as you can see, anyone with a brain can save money and do it consistently, and saving money is a foundation stone in the process of rewiring the brain to influence not how much you earn but how you do money. How you do money is the key. If you have read this far, don’t stop here, you read this far because you’re interested in a brighter future financially. If you want to explore how I can help you retrain your brain and enjoy a brighter future I am just a phone call away or perhaps start with grabbing a copy of my book. The key to a brighter future just needs you to take one step at a time.
Does monitoring your budget actually work
As a money coach I am often asked ‘How do I get my budget to work?’ People know a budget is a great thing to have but every time they try and put one in place, it isn’t too long before its broken and life goes back to that ‘Money In – Money out’ cycle. So let’s explore how you can fit it, but before we do that here’s what you...
