Archive for February, 2012

Your Economic Identity

Socrates stated that the unexamined life isn’t worth living. While that statement can be viewed as extreme, it is obvious that a key first step to living a virtuous and full life is knowing yourself. All of us, at one time or another, have wondered why some financial advice works for others but not us. Understanding ourselves financially is the driver behind meeting our financial goals.

Shane Satterfield, Marketplace Chaplains, shares with us in the video below how Economic Identity matters in our relationships and how it impacts our financial decisions for the future. Please watch the quick video and consider how financial behaviors play out in your family.
Your Economic Identity.avi
Your Economic Identity.avi
Shane has really identified an important issue….  Financial decisions based on other’s success, without a clear understanding of ourselves, can lead to frustration and anxiety. We are all uniquely wired and it is our financial personality that drives our behavior. There is no right or wrong economic identity and this process is not about changing who we are….it is a recognition that we each have specific strengths and weaknesses that we bring to the table. Each of us has two traits that influence how we think and two traits that influence how we behave regarding finances. By understanding how we think and behave, we can then make financial decisions that work for us.

 

Romans 12: 4-8 clearly states we each have different gifts. What are your financial tendencies and how can they be used to help build your financial future? Storing Treasures goal is to help you unpack those behaviors and create a long term plan that works for you and your family.

Your Economic Motivation

 

motivation  

The American Psychological Association completed a study about issues that cause significant stress in our lives. An incredible 76% of those surveyed indicated money was at the top of the list of significant stresses and relationships were second at 55%.  So, how do we begin to tackle the first rung of the ladder to become motivated to make positive financial changes in our lives and then SUSTAIN that momentum over the long term?
 
Motivation is a term that refers to a process that elicits, controls, and sustains certain behaviors.  I have had the opportunity to financially counsel singles and couples for over 20 years and have learned both the importance of motivation and key principles to stay engaged over the long haul. Listed below are seven of the most important  principles to remain financially motivated.

 

1. Understanding your role-  Have you ever worked at a job where you were confused about your role and seemed unable to motivate yourself to perform at a high level?  Understanding our role as stewards  can be one of the most rewarding and motivating aspects of the Christian walk. Take a moment and read Matthew 25: 14-30. MT 25: 14 states “The kingdom of God is just like a man about to go on a journey; who called his own servants and entrusted his possessions to them.” 
– We are managers and not owners.
– God has entrusted us with resources (talents).
– We are expected to manage those resources based on HIS principles.
 
Once a stewardship mentality is understood, motivation to make changes becomes an important part of our daily lives.
 

2.  Understanding your financial personality-  In my years of counseling, I have yet to find a more powerful motivator to improving financial success than understanding financial personality. The focus here is on grasping our unique wiring and then realizing how we think and behave matters in being a good steward and reaching our financial goals. We need to eradicate the shame, guilt, frustration, (put your word here) by moving past what we SHOULD do and focus on WHO we are. More to come next week on this topic in “Your Economic Identity.”

3. Focus on the “why”. The first step is to focus on the “why” of our values and goals instead of the “how. Julia Belyavsky Bayuk, an assistant professor at the University of Delaware, cites research that planning exactly how you will reach a goal, such as paying down debt, can actually make it harder to reach that goal if you dismiss the “why” behind it. For example, if you run off to complete a budget because you are overspending but do not focus on “why” you overspend, the positive effect and motivation to continue will be short-lived. The budget is just a tool…nothing more. Your first focus should be on your behavior. As you are getting started, focus on the motivation behind a goal first before the goal itself.    

 

4.  Dream- Begin with the end in mind- Take a few moments and answer this question. “10 years from now, the dream for my family’s finances is _____________.  Take some time and list out some of your dreams for your family finances. Include your spouse (if married) and complete a list together. Think big- don’t be constrained by where you are today. Then, post that list of dreams in a place that will inspire you to reach for the stars. Vision is one of the most important motivators we have…lets use it with our money!

   
5.   Embrace your circumstances- Circumstances in our lives can be a very powerful motivator to making changes. It could be the realization that you cannot do this any longer; it could be a bankruptcy or foreclosure; it could be that you are just tired of living paycheck to paycheck. Pain can be a very powerful motivator….if this is your story, embrace it and use it to make long lasting changes.  Your finances may not be in trouble but just on autopilot and you want to change your financial life for the better. Many of us have seen financial freedom modeled by friends or family and a simple motivation may be reaching out to that person for some support.
 
 6.  Create milestones and goals-    If you want to stay motivated to succeed with your finances, goal-setting is a must. Without goals, you lack focus and direction. Goal setting allows you to take control of your life’s direction and purpose. Luke 14:28-30 clearly states the importance of goal-setting. The key point is to do this by understanding your unique wiring. Goal setting and financial personality is an important part of our teaching so contact us if this is an area you want to explore. Remember- there are plenty of tools that help you set goals….our focus is on the behavior that will allow you to stay motivated long term.
 
7.    Track your progress-  Think of changes to your financial health as a marathon and not a sprint. Many of us did not get into financial strain over night and we will not get out of it that quickly either. However, the long term benefits to realizing your dreams and being financially free is an awesome journey you will never regret. So, how is this done?  One of the best ways to evaluate the long term impact of your financial focus is your net worth. List your assets and liabilities today and calculate that number. Then, estimate where you will be a year from now based on the changes you are implementing in your life. Continue evaluating where you are at least twice a year to see if you are moving forward.
 
“An object in motion will remain in motion and an object at rest will remain at rest unless acted upon by an unbalanced force.”  You are that force- get motivated to make a difference!
 
We’d like to hear from you- how do you get motivated in the area of money?
 
 
Looking forward to sharing about Economic Identity next week.
 
Blessings,
 
Mike