A few days ago I did presentation on good financial health. Following is the content of that presentation.
So what is good financial health? We all know that stress can cause dis-ease and of course money can cause stress! So it’s kind of easy to make the connection on how our financial life affects our health. We see it on the news more and more, suicides and murder-suicides due to someone losing a job or being financially overwhelmed. So, when I think of good financial health I think of not being stressed about money, understanding my relationship with money, and using money as a tool.
I believe the keys to creating good financial health are being aware of where your money goes, what you believe about money, and the different money type personalities and how to best use them.
As a Certified QuickBooks Pro Advisor and Professional Business and Life Coach I work with clients on MONEY. QuickBooks…money….Business…money. Most of the time the work starts out with the client’s desire to learn QuickBooks so they can keep track of their money, after all we’ve all been told that it’s important to watch our money…kind of like counting calories if you want to lose weight…right? So if you want more money, you “watch” where it goes. Now QuickBooks is obviously a terrific tool to track your income and expenses…it is even a good tool as a database for your customers, vendors, and employees, and offers great reports, but I’m not here to sell you on QuickBooks. I am here to discuss how to achieve good financial health.
The first step to good financial health is to know where your money goes, so of course I suggest QuickBooks, Quicken or some other financial software program. You must know how much money is coming in and where it is going out. Recently there was a story on the news of a school teacher living on $39,000 a year supporting a family of 4. They lived in a nice house and were essentially debt free. The teacher said the main thing to his financial plan was in knowing where his money went. Instead of paying $1.50 for a soda out of the machine at school, he brought his soda each day. He said he pays about 20 cents a can. So let’s do the math…$1.50 times 180 days of school equals $270 versus 20 cents times 180 days equals $36. Now for the bigger picture, if he is in a 25% tax bracket he would have to earn almost $300 to buy sodas out of the machine versus $45 to bring them from home. I often tell my clients it is the little leaks in the vessel that will sink the ship! So it is really important to know where you are spending your money. Almost all programs or systems to becoming debt free start with having the person keep a log of where they are spending their money.
But knowing where your money goes is only part of the story to good financial health. We all have a secret relationship with money. Maybe it’s a lusty relationship, or a greedy relationship, or even a needy relationship…whatever kind of relationship it is…it’s there…and it plays a huge role in your life and even in your health…whether you admit it or not. Often times people are not really conscious of their own relationship with money or how it formed. So the Second step is defining our relationship with money and our beliefs about money.
To define our relationship with money and our beliefs about money we have to go back to the beginning… what did you hear about money as you were growing up. You may have heard things like, “Money doesn’t grow on trees.” Or “Money is hard to come by.” Or “Money is the root of all evil” which was shorten from the actual verse that said, “The love of money, is the root of all evil.” How did your parents handle money? How did that make you feel? You must examine what you learned about money when you were growing up and get clear on whether you choose to continue to believe that. Once you’ve done that you need to examine what role money has played in your life as an adult. Have you been the main breadwinner or have you more typically been in a supportive role? What if the role was reversed…how would that feel? If you made more money or less money, who would have a problem with it? Do you feel if you were to make more money you would have to give up more time? If you made less money would you feel less of a person? Do you think money changes people and you don’t want to be one of “those” people? Do you think there is enough? Do you attach your self-worth or the worth of others to money? What do you say to yourself about money? “I can’t save money.” “Everything is so expensive.” “Why does everyone else have money but me?” or “I can’t let go of money.” or “If I made less money I wouldn’t be taken seriously.” “No one has any money to spend these days.” There are lots of questions you can ask yourself and thoughts about money…we could go on and on. But perhaps the biggest question is; Are you friends with money or is it the enemy? Whatever you believe about money will manifest in your life.
The third step to becoming financially aware is to understand the different money types and how you can combine these to create good financial health.
In the book “Money Magic” Deborah L. Price describes eight money types. I want to share those with you to get you to thinking about your money type: Ok here goes, there’s
• The Innocent
• The Victim
• The Warrior
• The Martyr
• The Fool
• The Creator/Artist
• The Tyrant
• The Magician
So how do we recognize these types, and identify which type we are? Well, I’m going to give you some descriptions…I am sure we've all known some of these money types.
For instance I have a friend who has no clue of what her take home pay is and how much her monthly expenses are, and let me mention she is a single woman…who solely supports herself…well she'd be The Innocent. Or I have a relative, The Victim, who continually makes bad choices with her money then blames everyone else and then gets her mother to financially bail her out. And oh boy, you know The Warrior type, she is so focused on money, she sets out to conquer the world, all in an effort to prove her own self-worth. Then there's The Martyr, poor thing, she spends all her time, energy and money on everyone else. I’ve known The Fool once or twice, they play by a different set of money rules, usually rules they try to stack in their favor, and often times actually cheating! The Creator/Artist type just finds it difficult to live in the material world and would rather not have to think about money. I think we've all known The Tyrant, another relative comes to mind, the tyrant dedicates his whole life to making money so he can use it to feel superior and control those in his life. Finally, there is The Magician, these are probably the millionaires and billionaires, because they know how to transform and manifest their own financial health!
Now most of us are probably a combination of money types. I could see small traits of all them in myself. At times I am The Innocent, because I would rather not pay attention to the money details, and sometimes I’m The Victim, who likes to blame the economic downturn, but then The Warrior in me will emerge, until The Martyr takes over and I spend too much money on my kids, then I truly feel like The Fool, and crawl into The Creator/Artist type who wonders why we need money anyway, until the Tyrant emerges reminding me that the one with the gold makes the rules.
So what would it take to get to the Magician, to have really good financial health? What is the trick? According to the author, it is actually learning to combine some of these types that will lead to good financial health. It’s calling on the Warrior and Creator/Artist as well as the Magician to create those feelings of financial well-being we all seek. The Magician is the one which knows the truth, the Warrior knows when to take action, and the Creator/Artist knows the purpose and spirit and holds the vision. Together, they are a powerful team, helping to inform the Innocent, soothe the Victim, open up the Martyr to asking and receiving, slow down the Fool, and temper the Tyrant. By focusing on the strengths of the Magician, Warrior, and Creator/Artist you will be able to overcome any weaknesses you have in the other areas.
To recap the three basic steps toward becoming financially conscious and thus creating good financial health…
1. Know where your money goes. Track your finances with QuickBooks, Quicken or whatever financial accounting software you prefer or with the help of a bookkeeper.
2. Define your relationship with money and your beliefs about money. Acknowledge thoughts, patterns, or habits that may not be creating good financial health, then work to create a plan to change the ones that may not be working in your best interest.
3. Learn to combine the best of the money types to focus on and leverage your strengths and overcome your weakness.
I believe with these three steps you will be on your way to becoming financially conscious and creating your own good financial health.
