Don’t Bury Your Head With Your Money
One of the first things that we ask our clients to face is the reality of their finances at this point. This is a simple exercise of writing down income and bills. For some, it is easy and quick, while for others it is difficult and stressful.
When money is involved, sometimes emotions of guilt and shame are also wrapped up in it. The feelings can be overwhelming, but we are here to tell you that the saying is true - “a journey of a thousand miles begins with a single step.” Remember, no matter how you got here, it is up to you to take the first step towards a better, healthier financial future.
“Remember, no matter how you got here, it is up to you to take the first step towards a better, healthier financial future. ”
Writing down your liabilities and income - yes, all of them – is the first step to your financial future. No matter how you got here, you have to pull your head up out of that metaphorical sand and look your financial situation straight in the face if you are ever going to make any progress. Without naming it all, you will always be walking the path with a weight around your neck. Bring it all out into the light so that you (in partnership with your coach) can make a plan.
So, how do you take the first step in bringing everything out in the light? Take the following steps to get started:
ASSETS (THINGS OWNED/OF VALUE) -
Write down all open bank accounts and their balances. This could be checking, savings, etc. Be clear about where your money lives and how much is in which account.
Write down any retirement, investment, CD, or other holding account that is in your name. These may not be a part of your day-to-day or month-to-month cash flow, but they will be important in understanding your larger financial picture.
Write down any additional assets and their values, such as a home or car that might be associated with a loan or payment. This asset will have a value that will be important in the larger balance of your finances.
LIABILITIES (THINGS OWED/TO BE PAID) -
Write down all open credit cards, lines of credit, loans, or other liabilities, their balance, and their status (current, behind, in collections, etc.).
Write down all associated bills and their due dates. This will come in handy as you begin to develop your budget. Understanding when bills are due and the payment associated will be important in your planning.
Once you have done these two steps, go through your checking account statement and make sure you have not missed anything that you make a payment to every month or a place you transfer money to regularly. Sometimes it is the obvious places or things that we forget to list.
After you have a complete list of assets and liabilities, you will be well on your way to seeing the path that is ahead of you as you understand your financial health.
Fun facts about ostriches - “Do ostriches really bury their head in the sand?”
