The first time I heard about financial planning was when I first saw Suze Orman appearing as a guest on the Oprah Winfrey show. She was coaching a college girl who was struggling with credit card debt and managing her finances. While watching, I remember feeling puzzled. How can someone be allowed to overspend like that? Why didn’t the bank block her card when she couldn’t pay back her debt? As I saw how Orman helped her make better financial decisions, I knew that’s what I wanted to do for others.
I’ve always wanted to educate people about their rights and how they can lead a better life even with a limited budget. Based on my experience, I’ve often come across people being exploited and pressured into signing up for a plan or a business that they don’t fully understand with the promise of big returns.
I want to give power back to the people. I really want people to understand that financial planning is easy and shouldn’t be complicated. This isn’t knowledge reserved for the elite; no matter what your financial background is, we can all make smart decisions with our money if we have a plan in place.
You Can Start Without A Financial Planner
It can be quite scary to open-up talking about your finances to anyone, let alone a financial advisor as it is personal. This is someone that will advise you on your finances and plans what’s best for you in your current position. Some people have amazing experiences working with a financial planner, while others may not.
A financial planner would be a great coach; with their experience they could help you reach your financial goals. Many people do need this help, but they may also have had traumatic experiences in the past and not everyone with financial success has a financial planner. If you’re not quite ready to work with a financial planner, you can try these steps first:
1. Putting Your Thoughts To Paper
Write down each one of your goals. It can literally be anything you really want that you can control. Perhaps you want to build cat houses for all the cats you want to save, or you want to retire early and travel the world. You may want to move to another country or start a business. Writing it down is important, to make sure you have clarity on what you really want.
Research on the human brain suggests that we have over 6,000 thoughts per day, of which 80% are negative. How are we supposed to reach our goals when we are not consciously writing down our positive goals? We must mindfully train our brains to work towards growth. We were built to be 80% negative, to protect ourselves. For example, we still wear our seat belts even though we drive carefully. We cannot get rid of negative thoughts, but we can consciously control it.
Once you have set your goals, you can now determine your next moves. What steps can you take to get you closer to your dreams? Where do you see yourself in three, five, and 10 years from now? What was your dream as a child?
When you set your goals, you can start to create a plan to build the life of your dreams. In this way, you can start to grow your finances in the same direction.
2. Create a financial map
While I was still dating my husband, I created an Excel spreadsheet with him back then and recorded all our financial details in that sheet, including our assets, liabilities and income, as well as our future goals. This simple spreadsheet really helped us to see how much money was coming in and out monthly, giving us a bird’s eye view of our finances.
As we approached the year of our marriage, we became more mindful about how we spent our money and how we spent our time together. We were very conscious because we shared a common goal, and constantly had great conversations about why we were making sacrifices. This really helped us to say no to things that were not aligned with our main goals.
3. Conquer your fear with action
We tend to always react irrationally out of fear. Having fear is a normal response, but fear can also be a driving force in your life. Fear is the greatest obstacle to financial peace. If you’re in the stage of fear and stuck in a place where you’re constantly afraid, you’ll be paralyzed. When you’re paralyzed, you won’t even be able to breathe, resulting in being stuck in a rut where nothing changes.
We may often find ourselves in a state of paralysis where we don’t know what to do in terms of our financial wellbeing. The only way for us to conquer this fear is to take action. Understand that at whatever stage you’re in, you must think like a warrior. You have to look at the money you have and the money you don’t with a warrior’s mindset, no matter what stage you’re in right now, to start taking action towards it.
Financial planning shouldn’t be rocket science. Everyone is able to reach financial clarity if you are willing to take the necessary steps towards it. It’s entirely possible to manage your finances alone; the main objective is to be clear about your financial standing and understand what you really want.
This article was originally published on Smart Investor, Malaysia’s leading investment magazine.