So You Want To Improve Your Finances?

There are THOUSANDS of financial advice websites out there. Some are free. Some are paid. Some claim by taking their $59.99 course, you can magically change your life financially by trading stocks. True? Doubtful. Even if it was, would that be fulfilling for you? I don't know, you do you.

I bet most of you aren't into the over-sensationalism of personal finance that has happened over the last 5-10 years. You would rather spend your time chasing more non-finance pursuits. However, understanding the role of money can unlock any life you'd ever want for yourself.

Sound like you? Have no fear, the Stay Frosty financial person is here. I'm going to lay out 5 key steps to get your gears spinning. This is how you should approach your financial journey when starting out.

Step 1: Zoom Out.

Imagine we're at the movie theater. (Streaming fans, stay with me here.) The newest blockbuster is playing, but when you get to your seat at the big screen, you see the only seat open is the one dead center in the front row. Dang.

The film starts and the action is happening, but you're missing the context on the broader screen. You're getting motion sickness and a neck cramp during this one. Oof.

You see where I'm going here. (Why do these seats even exist in the first place?)

When beginning your financial journey, take a step back from the numbers. Think about your lifestyle, what you enjoy doing, the way you approach things, and your relationship with money. Aggregate all the financial components within that. I'm talking about debt, bank accounts, loans, rent, credit cards, etc., that you interact with.

After this step, you should have all the personal financial pieces, along with the context that makes it yours. Personal finance is more than a bank account, it's also our psychology behind the way we choose to behave with money.

Step 2: Get it Sorted.

At this point, you have an unstructured mess of financial statements. Let's get this organized and structured.

Hate spreadsheets? No problem. I like them, but there are a multitude of free online tools you can connect your information with. Mint and Personal Capital are ones I recommend for aggregating all your data. They will categorize items based on your expenses.

Like spreadsheets and more ownership? Google Sheets is a free solution that rivals Excel (my favorite). You have the freedom to create whatever categories you'd like. One new-ish tool that I'm trying currently is Tiller. It's a $79/year tool that imports everything into a spreadsheet. It works with Google Sheets and Excel.

Step 3: What Are Your Goals?

Whew! We've come a long way. Now let's give your new found spreadsheet/online tool some meaning. I like following the SMART framework for my goals. It really helps to define exactly what you are trying to do.

Some basic (non-SMART) goals:

• An emergency fund covering 6 months of expenses

• Creating a budget

• $X/month to a goal

• Buying a house

• Moving to a new city

• Investing $500 a month

• Financially "free"

You can also set up spending/saving thresholds in the online tools I brought up earlier to notify you. Or you can create something manually in Excel/Google Sheets if you are so inclined. (I personally like this route better as it makes everything more intentional and in the foreground).

Not convinced? What if I said you are over 40% more likely to achieve your goals if you write them down? Click the link and read for yourself.

Step 4: Implement.

This is the entrée. The meat and potatoes. However you want to say it. Through the lens of your goals, wants, needs, and behaviors, it's now time to get this plan into action. That's it. Start saving $X a month, or whatever you had in mind.

Step 5: Check In Frequently.

This step is arguably the most important one. If you're hiking out in the boonies and don't check the map or compass, how do you know where you're going? We can't just blindly end up at our destination with our eyes closed. We have to be intentional. Try setting a defined period of time you want to take a look at your financials, like every other week.

I hope you took some value out of this. With all that said, I'd like to end this installment with a T.I. lyric snippet:

"Slow money beat no money, what you in a hurry about?"

Bonus points if you can name the track. Remember, money's a tool to achieve our goals, not the ultimate end goal in itself.

Stay Frosty,

Andrew