A waltz is a classic, three step musical composition with the old 1, 2, 3, 1, 2, 3, 1, 2, 3 rhythm. It is a joy to dance (with a little practice and a great metaphor for personal finance. Many great things come in three’s. The classic rock and roll songs have three cords, a stool needs a minimum of three legs to stand, and a good essay (according to Mr. Inman in 8th grade) has three points.
When I decided to change my personal financial life for the better, I unknowingly incorporated a three step process as well. Within each of these three steps are three smaller defining steps I had to take. Here they are:
To alter your financial destiny, you’ll have to change your course. The size of your financial ship will determine how much time it takes to fully turn it around and usually, the larger the ship, the longer it takes to turn it around. Of course, sometimes events such as hurricanes or very severe weather can alter a ship’s course very quickly, but let’s hope that doesn’t happen to you or me! To begin the process of change, you’ll need to take these three mini steps:
- Admit you need to turn things around. Admission of need is the first step toward change. I had to admit that I needed financial advice and help with establishing a budget. I had to admit I was unable to go it alone. I had to admit I was financially incompetent. For someone with my personality traits, that was very difficult.
- Discuss your situation with your spouse or someone you trust implicitly. I had to be willing to discuss our financial situation with my wife and admit that I wasn’t getting things done. I had to admit that I blew it and then I had to discuss ways that we were going to get the ship righted together. It isn’t easy to discuss your shortcomings with someone, but I had to do it.
- Organize your financial information and set your financial goals. To get my personal financial ship back on course, I had to fully understand where on the financial oceanic charts I was located and chart a course to where I wanted to go. This meant I had to get the balance, interest rate, amount past due, and payment information in front of me for ALL my bills so I could begin to make sense of things. I also had to do this for Consumer Credit Counseling Services anyway. I had to know and understand where my income was being spent. I needed to understand how my tax situation affected my net earning ability. I had to gather a LOT of information.
Just like sailors in the old days used a sextant to keep them on course by watching stars and measuring them according to three points, you’ll need more than just one change to keep your financial ship on course. I had to learn new ways of thinking to keep myself out of trouble. I had to learn entirely new ways of looking at money and financial resources. I had to learn new ways of looking at investments. My previous way of thinking had gotten me no where pretty fast. I had to learn what it meant to really manage my money. I did this by:
- Reading good personal finance books such as The Total Money Makeover: A Proven Plan for Financial Fitness I also read any news article, magazine, or Internet article on the subject of debt, personal money management, or personal finance.
- Connect with people who are on your side. I learned that to change you personal financial life, you may have to change your friends. Some friends just don’t understand why I don’t spend money like it’s going out of style. Today I connect with personal finance bloggers, readers of THIS blog, and others who share my values for saving money and saving it and investing it wisely.
- Gather information continuously. I’ve learned to gather information constantly, whether through the Internet, through blogs and bloggers, through seminars, or through simply talking with and getting advice from other people.
No one will do this for you. No one will ever care more about your personal financial situation than you yourself. You have to generate within yourself the attitude of gazelle intensity that so many bloggers talk about. You have to outrun the lions of poor budgeting, the lions of poor financial planning, and the lions of out of control debt. How?
- Decide that you’re going to become a financial knowledge center. Make a decision, right now, that you’ll change your financial life for the better. Once you make that rock solid decision, you’ll gather the courage to take the next mini step.
- Act on your decision at least once every day. Don’t let a single day go by that you don’t learn something new about your personal financial goals or take some sort of action that moves you in the direction of your goals. Every day. Without fail. Ever.
- Grow in your knowledge and personal development every day. I know that if I let things slide for too long, they become more difficult to catch up on, then I get even lazier as the pile grows larger and larger. It’s easier and a whole lot less painful to grow just a little every day than it is to grow a whole lot at once. Growing a lot at once is sometimes called an epiphany. It sounds nice, but it isn’t nice when you realize you’ve hit rock bottom.
In this article, I haven’t included a lot of numbers, financial, or technical information because none of that is nearly as important as the space between your ears. If you can get it in your mind that you’re going to change your financial destiny, you’ve won 75 percent of the battle. You may not have fully turned the ship around, but you’ll have made the rudder adjustments and have your charts out with a newly plotted course. Knowing where you’re going is just as important as knowing how you’ll get there.