5 Steps to Developing a Financial Plan that Works For Your Life

By on September 18, 2014 in Savings and Spending Plans

Many people that I meet know that a savings and spending plan that intentionally, authentically, and proactively manages their money is in their best interest.

Yet, somehow it doesn’t get created and they’re left living a life where they’re still not quite sure where the money is going.

There are several reasons for why people don’t design a plan: 1) they’re not ready yet to change how they’re using their money; 2) they feel as if designing a plan will restrict them (when the opposite is generally true and it frees them to know they’re using their money to support their dreams); and 3) they’re not sure exactly how to design a new plan.

Well, if you happen to fall into the category of “I’m ready to do this and I just need to know how to do it,” today is your lucky day!

Here are 5 steps to developing a new savings and spending plan that works for your life:

  1. Set goals – While most of designing a new spending and savings plan has to do with looking at numbers, this step is a critical first step to take to ensure that any new plan allocates how money is used in a way that aligns with whatever matters to you. The Jones’ next door will have different dreams than you do, so understanding what you’re up to in your life and where you want to go will be an important step to support you in aligning how you use money as a tool in your life. Determine what your short-term (1-3 years), medium-term (3-10 years) and long-term goals (10+ years) are and use these goals as a guideline to mapping your money outflow.
  2. Use financial history – Understanding how you’re using money right now in your life is the next step, and looking at how you’ve used your money for the last 3 months is what I typically recommend. It’s a decent enough timeframe to give you a solid idea of where most of your money is going, and whether there are areas that you’re spending money in that you’d like to focus on reducing your spending in the future.
  3. Develop a new plan – Once you’ve seen where you’ve been spending your money in the past, you can decide whether to continue spending in the same way or if you’d like to redistribute how you’re using your resources. You can review your current bills to see if there’s any way to reduce your expenses, you can look at your debt to determine a strategy to pay it down, and you can intentionally begin to save as well.
  4. Plan weekly cash flow – A new plan is great, and often comes in the format of “Income – Expenses.” And while this is helpful, I often find when working with clients that it’s even more helpful to map out each month how money will be spent on a week-by-week basis. This allows you to be intentional and strategic with how you’re using your income to pay your bills and live your life (i.e. groceries, entertainment, gas, etc.)
  5. Measure, monitor and adjust – Developing a new plan is only the beginning, however, since measuring against your plan and adjusting as necessary is a critical financial routine to have in place. Tracking actual spending against the plan that you designed is important, so that you can either adjust your spending to more closely approximate your original plan or you can adjust your plan to reflect the new spending. Life happens, and things are always changing – having a plan in place that reflects your current reality will result in you building financial health more quickly!

These steps are generally best done in the order noted, and can take some time to complete depending on how dedicated you are to working through them. In the end, however, you’ll have the peace of mind to know where your money is going and that you’re using it to support what you want in your life, and suddenly financial stress goes away and you begin to enjoy life.

So, is it time for you to take the first step to financially fuel the life of your dreams? There’s no better time than the present to get started!!!

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Excerpt from “A New Relationship With Money” (by Kerry Cudmore)

By on September 4, 2014 in Relationship with money

About the Author: Kerry Cudmore is a professional certified life and business coach, empowerment trainer, firewalking instructor, and author who has made a lifetime study of human expression. She creates and teaches methods that make complex concepts easy to understand and master so that clients and class participants can create joyful, prosperous, and fulfilling lives and businesses. She is founder of the Spiritual Finance Initiative, which is devoted to changing our individual and collective relationships with money.

Kerry used to have a terrible relationship with money. A disorganized wallet, piles of unopened bills, and daily calls from angry creditors were indications of just how bad it was. She decided to change things once and for all, redefining her relationship with money, and now helping others do the same in her Spiritual Finance class series. She has taught the class to hundreds of people since 2008, and now presents the basic Spiritual Finance philosophies in her new easy-to-digest bite of a book, “A New Relationship with Money”.

Click here to learn more about Kerry Cudmore and her work visit her website.

Click here to purchase “A New Relationship With Money” in hardcover or on Kindle.

When I teach people about changing their relationship with money, I always begin the same way: I ask them to describe money. In simple terms, and using whatever words and phrases come to mind immediately, I ask them to describe money and how they feel about it. They share things like, “It doesn’t grow on trees,” “I don’t like it,” “Here one day, gone the next,” or even “I hate money.” They add descriptors such as stress, worry, fear, not enough, anxiety, conflict, dirty, unattainable, unpredictable, untrustworthy, and mysterious. There is also a smattering of responses like, “It’s a resource” and “It helps me do what I need to do,” and words like necessity, fun (when you have it), and power. Many relate the belief that money is the root of all evil.

At this point I typically notice that the atmosphere in the room feels charged and nervous. The descriptions require effort and some degree of struggle and discomfort. I observe that my own breathing is shallow and that my palms have gotten sweaty. I ask people to notice the feeling in the room; generally, we can agree that it feels somewhat disturbed. People look uncomfortable in their seats and seem hyper-vigilant.

Next, I ask them to put the idea of money aside completely and describe the word “spiritual.” I explain that this word, to me — and in the context that we’ll use it – simply implies living according to your values, whatever those values may be. If your values are informed by a specific religious belief system, fine; if not, fine. It means living your life according to your values, however you define them. When people describe the word “spiritual,” they use words such as peace, love, calm, joy, happiness, growth, connection, faith, comfort, reassurance, trust, and serenity. As people describe living life in harmony with their values, I notice that the energy in the room quickly shifts.

Everyone breathes a deep sigh of relief, and people smile, calm down, and relax in their seats as the descriptions flow more easily. There’s less jaggedness and more connection.

We look at the difference between these two sets of descriptions — how dissimilar they are, and how different they feel to explore. I point out that it’s not just interesting what descriptions are on the lists, but what’s missing as well: Anxiety and fear never show up on the spiritual list, and peace and love aren’t used to describe money. This is revealing to me; it seems interesting to others as well.

I share my theory about money:

If you endeavor to live your life according to your values, and you are unable to describe money in the same way you’d describe your values, you can never have a healthy relationship with money. It cannot and will not fit with who you are as a person. Consciously or unconsciously, you’ll have to keep it at a distance – or you’ll be in conflict with your core beliefs. You’ll be out of alignment with your values.

At this point, I notice a pause in the room; it’s as if something has clicked into place and makes sense. If I could give it a voice, the pause would be saying Hmmmm. This is a different way to think about money, and it takes time to absorb the implications.

In the pause, I notice that people are considering this new perspective.

Why is it like this? How did it get this way? Why is there so much disparity between how money could serve us (as a resource in alignment with our values) and where many of us have ended up (in a place of fear, stress, and unease)? It’s all related to how we learned about it.

Most of us were taught about money indirectly, as if by osmosis. From a very young age we begin to pick up on subtle and not-so-subtle messages — messages that were rarely intended to inform us about money, but nonetheless did so in powerful ways; we acquire what surrounds us, regardless of whether that reflects our values. We absorb these messages randomly, yet they become our belief system about money, without our realizing that we even have a belief system.

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How to Assess and Improve Your Level of Financial Health

By on August 21, 2014 in Financial Foundation, Financial Health

When I first started working as a financial coach, many people would mistake me for a financial advisor or financial planner. They thought I was someone who would help them learn how to invest their money for retirement.

And while financial advisors and financial planners are dear colleagues of mine and are very talented professionals, my work is very clearly in a different space where I’m helping people with their budgeting and money management skills so that they can focus on getting out of debt and saving money with the hope of building a financial plan to support their goals.

So in order to help people better understand what I did (and what I didn’t do), I created what I like to call “The Financial Health SpectrumTM” which includes the 3 phases of Build, Protect, and Grow your financial assets. These 3 phases simply reflect different levels of financial health, and while none of the phases are “bad” there is an increasing level of financial health as you move from the “Build” phase through to the “Grow” phase. In helping people to understand what type of financial support they need, I encourage people to take a few minutes to assess where they fall on this spectrum so that they can properly identify which financial expert can help them with their goals and with improving their level of financial health.

In order to help you determine where you might fall on the Financial Health Spectrum™, let me explain each phase a bit further along with the respective professionals that you might want to connect with:

  1. Build phase — This phase is typically where the 70% of people living paycheck to paycheck who are feeling out of control when it comes to their finances will land. When building your financial assets, you’ll be looking to do such things as establish a budget (or what I like to call a “savings and spending plan” because budget is such a restrictive word), develop more proactive money management skills, get out of debt, and save more money. To me, this phase is about improving your financial stability and strengthening and repairing your financial foundation so that in the future you can grow your financial assets. In this phase, you might look to work with someone who can help you increase your income, decrease your expenses, or perhaps do both! This is the phase where I work with my clients, and some other colleagues who can help you in this phase include CPAs, money mindset coaches (to help you understand if you have money beliefs that are holding you back in some way), and salary negotiation coaches (so that you can maximize your earnings).
  2. Protect phase — This phase is generally exemplified by wanting to either insure assets (property and casualty insurance, life insurance, health insurance, disability insurance, or long-term care insurance) or planning to have your wishes known about what to do with your assets in case anything happens to you. Experts in this phase include licensed insurance professionals who can help you determine the right type and amount of insurance that you need and estate planning attorneys who can help you with drafting all necessary legal documents such as wills, trusts, family planning/guardianship paperwork, health care directives and proxies, and also Medicare/Medicaid paperwork.
  3. Grow phase — At the end of the spectrum, once you’ve strengthened your financial foundation and protected the financial assets that you do have, you’ll also want to think about putting your money to work for you and growing it through investments and other financial vehicles (i.e. annuities, etc.). The financial professional you’ll want to consider in this phase is a financial advisor or financial planner who will take the time to understand your future financial objectives and design a plan customized just for you to grow your money over time to achieve your goals.

As mentioned before, there is no “right” or “wrong” phase to be in, these phases are simply an opportunity for you to recognize where you’re at right now and determine the next steps that you’d like to take for yourselves to improve your financial health. I also encourage people to think about moving along the spectrum as a longer-term process since strengthening your financial foundation and building financial independence is often a multi-faceted journey that takes place over time and with attention to progress (and not perfection). It is also important to note that you may be in more than one phase at the same time (i.e. saving for retirement while looking to more proactively manage your monthly cash flow and put the proper legal paperwork in place).

Taking the time to understand where you are on the The Financial Health SpectrumTM may well be one of the most productive things you can do to stop and assess your level of financial health. What is your next step to strengthen your financial foundation? Is there a financial task you’ve wanted to handle for a while and haven’t yet taken care of…perhaps because you don’t know the next step to take? Do you know which financial professional would serve you best to take that next step forward?

If you’re ready for a solid resource to support you on assessing your financial health, The Financial Health Telesummit may well be the answer — and the best news is that for a limited time, I’m sharing this valuable information with you for an investment of just $97! CLICK HERE to learn more about how some of my favorite colleagues and financial experts can help you decide on the next steps to take in improving your financial health and to determine whether this resource supports you in powerfully paving your path to financial freedom.

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My “Top Ten List”: Money Management and Personal Development Books

By on August 7, 2014 in Money Management, Success

As an avid reader, I am continually sharing my favorite books with friends, family, and clients alike. As I relax into some good books myself this week while on vacation, I thought I’d share some of my favorite books with you on the topic of money and self-development. (Note: the books below aren’t in any particular order, they’re simply some of my favorites.) I’ve also shared a note or two on the topic of the book as well as why I typically recommend the book so that you can more easily determine if it’s something you might be interested in yourself.

  1. Secrets of the Millionaire Mind (T. Harv Eker) – This is one of my “go to” books for clients as it focuses on understanding the difference in habits between rich and poor people. Focused almost exclusively on money mindset and understanding your personal financial blueprint, this book can help you to identify what subconscious money beliefs and habits might be standing in your way so that you can start attracting more money into your life.
  2. The Soul of Money (Lynne Twist) – This book is a more spiritual look at how we view money and our money consciousness. Many people talk about scarcity and abundance when it comes to money, however few talk about the concept of “sufficiency” and living with a certain level of money that simply makes us happy (and taking the time to determine what that level looks like). One of my favorite all time quotes about money comes from this book: “Know the flow – take responsibility for the way your money moves in the world.“
  3. Smart Women Finish Rich / Smart Couples Finish Rich (David Bach) – Both of these books offer tremendous insights into the practical day-to-day aspects of money management as well as a longer-term focus on investing and growing your net worth (i.e. concepts like time value of money are explained). If you’re just starting out, or looking for a book to give to a young woman as a graduation gift this would be a great choice.
  4. The Law of Divine Compensation (Marianne Williamson) – This book focuses heavily on the spiritual principles of faith and money, and how money and abundance can be attracted by strengthening one’s faith. This book isn’t for everyone, however if you’re a person of faith (religious or spiritual) this book may interest you…it’s one of my all-time favorites and my clients love it too!
  5. The Big Leap (Gay Hendricks) – This book isn’t specifically about money, however it focuses on how to recognize the signs when you’re pushing the edges of your comfort zone and the world seems to just go crazy! If you’re at a point in your life where you’re growing in leaps and bounds (or you would like to be), this is a great resource and read for you.
  6. The Slight Edge (Jeff Olson) – Sometimes in life, it’s all about the simple steps we take little by little to move us forward. Unfortunately, we often forget that simple steps, when accumulated, can have a tremendous impact on how far we go. If things feel overwhelming sometimes and you’re looking for some motivation to learn how to start moving things forward in your life, then this book is a great place to start inching forward and gaining your “slight edge.”
  7. The Success Principles (Jack Canfield) – This book is like a “success Bible,” giving you many steps that you can take to move toward the most successful version of yourself. It’s a long read (over 500 pages), but it’s easily digestible in short chapters focused on different aspects of successful behavior.
  8. The Art of Extreme Self-Care (Cheryl Richardson) – While the topic of self-care may not seem like it has anything to do with money or the topic I work on with my clients, it’s often one of the first hurdles that we need to acknowledge and address – busy people forget to take care of themselves and then run the risk of injuring themselves either in the short term or the long term, which could ultimately impact their earning capacity (i.e. disability, stress, underperformance at work, etc.). If you’re looking to crack the code on how maximize your ability to perform in your life and at work, start with this book to learn how to take care of yourself.
  9. The Gifts of Imperfection (Brene Brown) – Often times we get caught up in who society and others tell us we should be. When we chase other people’s dreams, we end up being unhappy. This book is about the journey from “what will people to think?” to “I am enough.“
  10. Daring Greatly (Brene Brown) – This book’s premise is that when we acknowledge our fear, embrace vulnerability, and adopt courage in our lives that we, too, can live a whole-hearted life full of happiness and joy. (Note: it doesn’t claim it’s easy, it simply claims it’s possible if you’re willing to do the work and dare greatly!!)

I hope that at least one of these books piques your interest and helps you grow in some way – enjoy!

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Facing Your Financial Fears

By on July 24, 2014 in energy of money, Financial Fear, Money Mindset

Just the other day, one of life’s lovely ironies came and sat in my lap. Want to know what it was?

I came down with a pretty decent case of what I like to affectionately call the “financial grungies.” Pretty ironic given that I teach money management and proactive finances for a living, right?

So what are the “financial grungies” exactly? For me this time, it felt like not wanting to honestly take a look at something related to my finances (more about that below), a knot in my stomach, a racing mind, and my blood felt like it was coursing through my veins at an extra-quick pace. Oh, and all of that was wrapped up in a nice big bow of FEAR and SCARCITY. Yuck, yuck, yuck. It was so clear that financial fear had come to pay me an unwelcome visit.

Yup, the teacher and healer got to use her own tools to heal herself. Gotta love it.
And here’s what I reminded myself of when I got to diagnosing the situation at hand and whipping out my financial toolbox:

  • BREATHE! This may be the most important suggestion I’ll make in this entire article. Living in the knot-in-your-stomach-blood-coursing sense of panic won’t ever serve you, since it’s highly unlikely that you’ll be able to think or operate from a clear space. So this is exactly what I did when I felt the fear kick in – I stopped what I was doing (or should I say what I was pretending to try to do….and I was doing it very ineffectively I might add), and I moved to the nearest chair and started to breathe deeply, in and out. The sense of panic and fear within me slowly died down after a few minutes.
  • Raise your vibration – Breathing normally is only really the starting point and it’s intended to try to restore you back to an equilibrium point (and out of the “grungies”). Once you’re feeling somewhat stable, you’ll want to do something to jump start your energy again – think of it like a car battery where you want to give yourself an electric charge. Depending on what gets you going, you’ll have a different way of raising your energy. Some people dance or exercise, yet for me I find it soothing to listen to a guided meditation that’s specifically wired to reset my brain waves. When I did this the other day, on the other side of 15 minutes I was already feeling much better and was ready to take on the next step. This step is important and the intention is to put you in a positive frame of mind before you move forward to see what’s at the root of the financial fear you’re feeling.
  • Get clear on what gets to be handled – I’ve said for years that financial clarity leads to choice, which leads to the ability to contribute in a bigger way, which results in a higher sense of connectedness. Without clarity, you’re often left feeling disconnected (from yourself and from others) which only enhances the sense of fear in the current situation. For me, I knew that over the last few months I had been investing quite a bit of money into my business and myself (as the business owner). After breathing and meditating, I got clear that the task ahead of me was to update my list of business investments. I knew that the investments I made were wise ones (and ones I would make over and over again), and so I knew it was time to briefly summarize the dollar value of those investments.
  • Break down the task (or tasks) to small, manageable steps – In my example, the tasks to be completed were relatively simple in the sense that it involved consulting transactions and balances on various bank and credit card statements. In your case, it might be a bit more complex, in which case you’ll want to think first about the end result you want. From there, think about the first step you would take, then the second, then the third, etc., continuing until you have a solid flow of steps mapped out to get you the end result you desire. As examples, if your task is to work on getting out of debt you’ll want to understand the total amount of debt you have along with interest rates and minimum payments. If your task is to be saving more money, you’ll want to get clear on what you want to save for and how much you want to save.
  • Take one step (and repeat until complete) – It’s as simple as it sounds – take your first step as soon as humanly possible to build positive momentum and start shaking off those grungies once and for all. I know that the minute I sat down at my computer and started a brand new business investment summary that I instantly felt much better…and it only got better from there!

The outcome of taking each of these steps is that you are able to accept the situation as it is, and in a grounded way work through whatever financial challenge is contributing to the fear at hand. As a bonus step, it may also support you to confide in someone you trust what it is that you’re working through (both the fear and the steps you’re committed to taking), so that they can hold you accountable to the steps that you want to take as well as support you in moving through the fear in whatever way they are able to.

In the end, the lesson here is that no matter how proactive you try to be (and I’m very proactive!), sometimes financial fear secretly slips into the picture without you even realizing it. And if you ignore the fear, you may end up significantly altering your road to financial freedom by inadvertently sabotaging your financial plan.

So don’t let financial fear hold you back from standing fully in your power – begin clearing away the fear and start healing and transforming your relationship with money today!

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