financial management 101, learn financial management basics, fundamentals, and best practices

0:05 what does money mean to you that simple question probably prompted a lightning fast Association some people might flash on happiness or a burden even before there's a word there might have been a feeling somewhere between excitement and uh-oh on one level money is a numerical tool that provides a fluid means of exchange and storing value but money also Taps into our lives and culture on multiple levels from family Dynamics to social norms from our sense of survival to our need for belonging money means far more than just rational decisions about dollars and cents for example have you ever known someone who's really tight with a dollar I'm not talking about someone who has to be careful to make their income stretch I'm talking

0:51 about a person who scrimps Beyond any Financial reason this person may frustrate those around them when they balk at paying their fair share or take extreme efforts to do something on the cheap let's look at the ways in which money has meaning Beyond just the numbers the ways your financial life reflects your expectations of how someone like me should think about and use money the ways that money determines the groups you belong to reinforces your important relationships or causes you to be excluded the ways you feel prepared or not prepared to direct money and assert your right to be in charge the ways that money protects you from harm or future need the ways that money itself is a source of fear degradation or shame so where do these associations come from in general meaning it's attached to money in two ways

1:42 one is through our previous experiences messages and relationships what we see and learn as children has an especially profound effect on how we think about and use money as adults the other way is simply an effect of how our brains work in his book Thinking Fast and Slow psychologist Daniel conman outlines how mental tasks can be thought of as falling within one of two systems system one our fast system is basically our automatic pilot it's the way we engage the world system one senses danger perceives patterns and makes inferences based on certain cognitive shortcuts called heuristics this system is fast because it uses our past experiences to make predictions about what to expect in the Here and Now if you've ever felt in your gut for example that five dollars is an obscene price to pay for a slice of pizza you're not checking your bank

2:32 balance or assessing the cost per ingredient to make that decision that reaction is just system one quickly skimming through your pizza history and coming up with a handy belief about what one should pay for a slice our second system system two is activated when a task requires specific attention and mental effort such as reading a textbook or following directions to an unfamiliar destination you might think that most of our financial choices would be handled by System two but think again unless we're performing a complex evaluation or trying to do something different with our money system one will quickly use meaning as a way to help navigate the volume of simple decisions we face each day I want to be clear that these associations with money are completely natural and the goal here is not to strip them away

3:18 instead We Begin by appreciating that while they help us to act efficiently sometimes they can be obstacles to the life we want simply bringing awareness is always the first step the purpose of making a doing versus being distinction is to bring the bad with money label out of the realm of identity and into the realm of behavior identity provides meaning to a pattern of actions that we then internalize as something that's true about ourselves even when this identity is negative we have a harder time changing when we see it as a part of Who We Are behavior on the other hand is something we can work with for example some common themes I hear of how a person is bad with money include not saving enough or avoiding opening bills and missing due

4:07 dates but unlike something that describes our way of being these ways of doing are actionable we can bring awareness to how when and why we do them and create strategies to do them differently that doesn't mean that change is easy we first need to understand that Financial choices are determined by a whole Matrix of competing needs the most important are basic physical needs like food shelter and safety we have to eat and keep a roof over our heads but beyond those basic needs money often plays a key role in how we regulate our emotions and meet psychological or social needs we might buy a new outfit to feel more confident For an upcoming interview or decide to meet a friend for coffee when we're feeling stressed and lonely but perhaps

4:52 the trickiest factor is the timeliness of the need is this something we require right now or will we need it in the future for instance we all know that we need to save her retirement failing to do so can put our future Security in serious Jeopardy but a goal this big requires sustained effort and sacrifices over a long period for a payoff that may be decades down the road in the meantime there will be a million instances where the money that you intend to save could be spent elsewhere this summer you decide to travel for a family wedding and in the fall you find out that your kid needs braces or maybe it's been a tough week and you just want to buy yourself a new pair of boots and not read the 401K prospectus what do we do when our needs compete with each other expecting

5:39 ourselves to always be self-disciplined isn't the answer self-discipline is a resource it gets used up when we've already made a lot of decisions or when we're hungry angry lonely or tired we can replenish it with rest or self-care but we don't always have it in the tank at the moment of choice in fact we can actually measure how our mental Reserve gets exhausted in research by social psychologist Roy Baumeister subjects were asked to turn down sugary treats or resist crime during a sad movie in another experiment they had to choose between a long list of consumer products after these tasks they were given a classic test for self-discipline holding your hand in ice water for as long as possible it's pretty uncomfortable so the impulse of course is to pull your hand out

6:25 those subjects who hadn't had to turn down dessert hold back tears or think about candles versus t-shirts we're able to keep their hands in the ice water for an average of 67 seconds the other group 28 seconds less than half giving in to impulse doesn't mean you're bad with money the key is to anticipate the ways that your future needs are in competition with immediate needs and create a cash flow structure that provides the best balance between them so far we've looked at the multiple ways that we experience money from symbolic and meaning filled to physiological and subject to the operations of our brains and bodies let's take a moment to focus how in some instances Financial stress can trigger a powerful physical response that overwhelms our

7:14 ability to think and act clearly the limbic system is responsible for putting our bodies into a state of alert when we perceive a possible threat and threat doesn't mean just physical danger as we grow up our limbic system encodes any and all manner of things that make us feel Afraid from public speaking to being in a crowded elevator to receiving a notice from the IRS for many of us money triggers the fight-or-flight response quite routinely this might be because you're under a high level of financial stress or you may be particularly sensitive to some of the emotional aspects of money your body actually can't tell the difference the response is the same if money is a trigger for you then you've probably already discovered how difficult it is to think your way out of fear remember we're wired to survive so our bodies will prioritize

8:04 a threat response over other mental functions blood flow in the brain is directed away from higher level cognitive operations meaning it's literally impossible for you to think clearly until you've brought this reaction under control we need to calm down not try to problem solve when you notice this happening to you try some of these tips take deep breaths one of the key features of the fight-or-flight response is quick shallow breathing when you take deep breaths you tell the amygdala to slow the release of stress hormones and begin the flow of endorphins do a simple physical activity with a tangible result discharge some of that physical agitation by moving your body and restore your sense of control with a task load the dishwasher jog around the block do five minutes of yoga get outside our environment

8:55 has a direct effect on reducing stress especially if we can be in sunshine or nature if you can go for a quick walk even better as you also get to combine being outside with moving your body take mini breaks trying to push through tension only increases it when working on financial tasks that cause stress give yourself permission to pause and replenish your energy and focus set the timer for 20 minutes and when the timer goes off take five minutes to stretch and clear your head finally connect with people social animals that we are we're wired to be soothed by the presence of others invite a trusted partner to join in money tasks talk through options or just make a plan to grab a cup of tea with a friend using these techniques will help you to meet the body where

9:41 it is and transition out of the fight-or-flight response into a state of calm Focus once you're there then you can address the source of your money worry and more effectively problem solve now we've covered some ways to calm the fight-or-flight response but not all Financial stress is overwhelming in fact stress can actually be a very useful and important signal that tells us that something in our lives requires attention in this section of the course we'll focus on financial behavior and how we prepare and organize ourselves for change when your financial life is in balance it doesn't necessarily mean that everything is perfect but there's an overall sense of Harmony in those areas of life where money provides meaning and there's a

10:28 system to meet your everyday needs and long-term goals you may not have a string of fat zeros on all of your accounts but you do have a plan and your choices are in alignment with that plan but let's say that that's not the case when money is out of balance the way that we first notice that is an emotional cue we feel stressed stress is uncomfortable and unpleasant and that's the point its job is to get us to wake up and identify what needs to be addressed in fact most of us want to do that as quickly as possible so that the stress will go away enter system one our fast and automatic system which jumps in to provide an interpretation of events and tell us what we should do sometimes it's accurate but sometimes it simply repeats an old childhood message like you just have to work harder

11:15 system one is not set up to deal with complexity and financial issues are often complex in order to respond effectively to the stress cue we need more than just our gut reaction the first step is to notice when something around money feels off or causes concern observe what you're doing when the feeling comes up or if there's a particular thought or image next we notice the message the original interpretation that comes from system one isn't necessarily wrong we just want to be careful not to treat it like truth with a capital T finally we focus on tolerating the feeling we don't need that unpleasant feeling to go away entirely the key is to stay in a functional Zone when there's no stress there's no motivation we stay firmly in the status quo when we're at the top of the chart we lose the ability to think and act clearly and need

12:05 to use our techniques to calm the limbic system back down when we're in this middle Zone we're motivated to explore change while still able to do the higher level analysis that system 2 provides this is how we end up with a more clear-eyed and informed solution rather than a knee-jerk response we can even use another one of our core Essentials called yes and to help us out being conscious about money often puts us in touch with emotions like frustration anger or fear yes and acknowledges the emotion but redirects Focus back to the task at hand if we're working on an exercise to track spending for example and you notice that you're feeling particularly annoyed because you wish you could just buy a bagel and coffee without having to stop and write it down you basically tell yourself yes I am frustrated

12:51 right now and I'm going to log this 395 and go on with my day we don't ignore the feeling we don't judge or analyze it we just notice it and try to bring attention back to the action learning to tune into and tolerate the feelings that come up when exploring money is something we will continue to work on don't worry if it feels a bit awkward at first with practice it will get easier to know when stress is telling you to do something and when it's just a distraction for many of us the solution for how to bring money into balance is not always clear we know from The Matrix of competing needs that sometimes making a new Financial Choice will address one goal but conflict with another which is better reliable but low wage and low meaning

13:40 work or continuing to take the gamble on rewarding work that might also lead to more opportunities people often wrestle with this question for years while the consequences of indecision add up without a crystal ball we don't always know the right thing to do and thus it's common to feel stuck between something that's not working and that unknown something else but just as we reframe stress as an important and valuable signal in the change process we can do the same with that feeling of being stuck the two terms we most often associate with feeling stuck are ambivalence and resistance ambivalence is when we have strong opposing feelings about something we want to do it and we don't want to do it ambivalence is not a sign that you're not ready to change in fact it's considered

14:26 part of how we prepare ourselves for Something New by ensuring is this change really necessary remember human beings are wired to be creatures of habit we continue following familiar patterns for as long as possible because that's where our automatic and intuitive systems work best you work through ambivalence by listening to what it's trying to tell you one tool we can use to explore our conflicting feelings is a list of pros and cons when we've written down everything from takes time I could be doing something else to don't want to find out I have to work even more we then look at all of the positives that might come from continuing what are your pros and cons for continuing to explore changes to your financial life will it take effort but have the potential

15:11 to work better maybe you have to give up something but could also open up to a new goal the idea is to get these thoughts out of your head from the scariest and the grandest to the most trivial it actually doesn't matter which side of the list is longer this isn't an exercise in quantity it's about making full acknowledgment of your conflicting feelings and moving forward with your eyes open the next place we often get stuck is feeling resistant resistance is the act of opposing or struggling with alterations to the status quo resistance is like friction it's the drag we feel when we're trying to move forward people are often surprised by how hard it can be to do something new even when they feel totally committed to doing it sometimes it looks like fear of making the wrong choice or not knowing how to do something new

16:01 we might feel stuck wishing the old way still worked we might struggle with feeling powerless in the face of change that we don't want or just exhausted by the effort The Core theme Here is a feeling an emotion that comes up usually around a task we don't want to do and resistance is our human way of saying slow down resolve this feeling even positive change involves letting go of something in order to make room for something new so the function of resistance is to work through that loss and make sure we're not inadvertently sacrificing something important in our rush to fix to work through it we can try the refocusing technique of yes and from our core Essentials but if that doesn't work we can use baby steps the baby steps technique is a way of staying in control when you have strong feelings by modifying what you're asking yourself to do

16:51 let's use our tracking example again if you're recording expenses and that emotional cue of I hate I wish I fear is so strong that it's tempting you to give up ask yourself what is a smaller piece of this task that I can commit to you might give yourself permission to just collect receipts and log them at the end of the day instead of entering it right after your transaction sometimes just giving yourself permission to do less is all it takes to find your motivation again but even if you do end up with a modified task that's okay the important thing is you stay in the driver's seat and keep yourself moving forward trying to Simply push yourself through feelings of ambivalence and resistance is a major reason why people burn out and give up but these cues are nothing to be afraid of

17:38 rather embrace them as a way to make sure the changes you seek are the right changes for you doing versus being identify specific actions and behaviors you can take as opposed to wishing you were different yes and when feelings come up notice them without judgment and bring Focus back to action baby steps modify a task instead of giving up when feeling overwhelmed these three tools have to do with self-organization with keeping ourselves centered and focused as we work on a larger goal but we also need to make sure our goal itself is well organized how do we do that simple Parts take a large or complex goal and break it down into smaller prioritized items

18:28 capacity check ensure that you have the necessary time and energy for a given task relative to other priorities and commitments in your life time frames assign a specific time frame for goals priorities and activities resource check identify any outside support information or inputs that are necessary to reach a goal altogether the core Essentials are like the navigation system that gets you from Financial point a to financial point B as we unpack the elements of your financial life in the next section of the course we'll continue to use the core Essentials to help you bring money into balance now that we have the core Essentials to help us stay organized and on task we're ready to

19:15 outline the four-step process we'll use to create your cash flow plan this is a living framework of how to direct your dollar so that they fuel the things that are important to you if you've tried to create a cash flow Plan before it may have gone something like this find yourself very stressed about not having the money for something say an upcoming Bill berate yourself for those times you spent money that you wish you hadn't and promise yourself that you'll stop doing that think of other categories of spending that seem unnecessary forbid yourself from ever indulging in them again write down some numbers that reflect this future of brown bread and evenings at home stick to it for a while then slide back into old ways and old habits repeat this is not the picture of healthy financial management this is using a budget as a form of punishment for past mistakes

20:05 to do better we need a way to disrupt old patterns turn down the volume on limiting beliefs and double check our assumptions to make sure we're not getting tripped up by mental shortcuts and cognitive biases we do this in four steps these steps are gather information analyze decide and act in the first stage Gathering info will get clear about how and when money comes in and how and when it goes out in stage 2 we analyze the information we just compiled we introduce our model of cash flow priorities determine where we stand and identify options for ways to bring money into balance in stage 3 it's decision time we come up with the first draft of our new cash flow plan we figure out where we want to make changes in our finances and think through what we need to

20:52 do to make those changes real and finally in the last stage we organize and implement the plan with an ion developing a sustainable financial management routine to support it though the process itself sounds simple you'd be surprised how hard it is to hold ourselves to it the challenge is that we need to do these steps in order and to completion that means we can't be gathering information and analyzing it at the same time we can't jump to a conclusion based on our first hunch and the kicker we can't change anything until we've done all of the steps all of them following these steps helps us stay in that functional Zone by not rushing the process we give our deliberate analytical system to the opportunity and materials to do its job

21:38 now you're not just reacting to financial stress you're weighing options resolving dilemmas and laying the foundation for your commitment to long-term Financial Wellness let's get started We Begin by looking at how money goes in and out in your life today the outflow side is divided into four sections committed monthly expenses and flexible monthly expenses and committed periodic expenses and flexible periodic expenses now committed in our case doesn't mean that you can't ever change these things it just means that it's not something that you're deciding on a moment-to-moment basis at some point you've already signed that lease or contract for your cell phone plan you know you should expect a bill from your Energy company and so on

22:25 the items in this category are all pretty easy to find out some of them you might already know off the top of your head but a quick review of your bank or credit card statement will confirm the exact amounts you'll notice on the worksheet that we specify credit card minimums even if you always try to pay more than that for now we ask you to write down the minimums first of all only the minimum is a committed expense anything above that is considered discretionary and number two when people make the mistake of trying too aggressively to pay down their balances they often leave themselves short when other expenses are due and what do they use to cover those expenses that's right the plastic so for now if you carry credit card debt only write down the minimum payments in your committed expenses section I promise that

23:12 one of the first things we'll analyze in the next video is if you can afford to pay more next we get to the flexible monthly expenses be a little trickier some like clothing or haircuts may not fall neatly into a monthly framework review the last three months of your bank and credit card statements to find all of the expenditures you see in the flexible monthly expenses section add up the individual categories and take a monthly average for smaller out-of-pocket expenditures like coffee or convenience food I recommend tracking your spending for a few weeks tracking is not only a great way to be more conscious with your money it will also give you the highest degree of accuracy record what you spend as you spend it either on your phone or a piece of paper tucked in your wallet or by making a little sleep

23:58 to keep around your credit or debit card each week take all of the lists that you've created and organize the individual expenditures into the categories on our monthly flexible expenses sheet just note that the last week of the month will actually be longer than seven days as you continue to the 30th or 31st unless it's February the month won't fall neatly into 28 days many people find it tough to track without reducing their spending either they're uncomfortable with the feelings that come up around it or it's just inconvenient so they do it less remember at this point we're trying to get a baseline measurement of what you normally spend no changes so two tips one when you're writing this information down pretend you are a neutral scientific Observer and you are your own subject your job is to get the data the other tip is to refer to your core Essentials maybe

24:49 you need to take a yes and moment to notice your feelings and bring awareness back to the task or maybe you need to use baby steps yes the numbers are important but practicing healthy financial behavior is even more so this is a task that will burn you out and make you give up modify the task next let's look at periodic expenses on the committed side we'll have things like insurance premiums or medical deductibles on the flexible side you might have holiday costs or travel once again you'll need to review your bank and credit card statements to figure out how much and when you've spent on these items the when is important because we'll use that information to figure out when you need that money to be there in the future now we can look at income if you receive an annual salary this is easy to determine but

25:37 for Freelancers or entrepreneurs income is often variable and this can make cash flow planning much harder let's identify all of your income sources and think about whether the money you receive is regular seasonal or unpredictable we still consider an income source as regular even if it ranges a bit like if you get paid by the hour or shift and those can vary from week to week just capture the range and multiply it out for the month next notice if you have any seasonal sources of income maybe your work is influenced by the cycle of the school year or fluctuations in the hospitality industry that would cause you to have boom periods and dry spells finally there are those income sources that are not predictable at all many Freelancers and entrepreneurs are constantly hustling for business but they don't have control over when they're going to book a gig

26:26 feel like this is a bit complicated that's okay it's not supposed to look like a plan just yet all we want right now is the best description of how and when money goes out and how and when money comes in when we have all of that together then we can start to ask some important questions now that you've gathered all of the information about your income and expenses our next step is to determine your cash flow position and priorities we'll do a bit of reflecting in the next two videos so be ready to take some notes we can organize cash flow priorities using the 3s model 3s stands for safety stability security

27:11 priority number one safety cash flow safety means you can meet basic food shelter and health needs for yourself and any dependence on time without incurring debt priority number two stability cash flow stability means you're able to meet your basic safety needs and can start to prepare a financial cushion for needs and goals that are not immediate this cushion or contingency fund is there to cover periodic expenses dips and income or any Financial surprises the size of people's contingency funds vary most experts recommend having at least three months of expenses reserved but A good rule of thumb is the more your income and expenses swing the more you'll need to have put aside I like calling this a contingency fund instead of an emergency fund because I want you to feel comfortable taking money out when an appropriate need arises and then

28:00 putting money back these kinds of situations are usually not as dramatic as an emergency when you're at this point and you're building up your financial cushion you also know that you can afford to pay more than just the minimums on your credit cards and finally priority number three security when you're paying your bills on time not incurring debt and you have a contingency fund now you can start to make progress toward long-term Financial Security goals like retirement asset building or saving for your children's education sounds great right you can get there let's figure out how the first question is where am I in the 3s model knowing where you are as a way of using our simple Parts principle from the core Essentials the journey to reach your loftiest financial dream starts today with your first step right from where you are

28:50 next we ask what challenges do I face to reach the next stage usually people respond with I don't have enough money I get it but let's try to drill a little deeper than that some common answers could be I have to use my credit cards just to survive I'm not even at cash flow safety or I'm okay most months but I'm not prepared for periodic expenses when they're due or maybe my money comes in in unpredictable lump sums and I don't know how to organize it no matter what your answer is be as specific as possible exactly how much is your monthly deficit how much do you need to have on hand for periodic expenses how many months do you sometimes go between gigs review the information in your cash flow worksheet and take a moment to write down the specific challenge you face to reach the next stage

29:40 now we focus on generating options what possible changes could I make to resolve my challenge notice the plural possible changes it's good to just brainstorm and come up with as many options as you can at this point don't rule anything out and don't commit to anything for example if you have a deficit of X dollars make a list of all the ways you could trim your spending boost your income or do a combination of both to reach that number maybe your monthly cash flow is fine but you repeatedly find yourself short for periodic expenses one option is to reduce some areas of your regular spending so that you can build a portion of those costs into your monthly plan though generating multiple options takes some effort one of the key benefits is that it helps us regain a sense of control when Financial stress

30:28 has us feeling trapped it can also open our eyes to possibilities we may not have considered before congratulations on all of your work so far gathering information about income and expenses and generating options for change is already a huge accomplishment in this video we will decide which of your identified options you're going to try first and create a plan to implement it in general the easiest changes that you can make are things that are of little importance to you you only have to choose once or vary infrequently and meet a need that's easy to satisfy in other ways let's use an example to demonstrate say you have a regular salary which reliably covers your

31:16 safety needs but you often find yourself short when periodic expenses come up and you have no Financial cushion you don't have any ideas for a side hustle so your first plan is to look for expenses that you can cut to the tune of one hundred dollars a month your options are your 110 premium cable bill to stop buying prepared food at between five or ten dollars a day or start riding your bike to work and saving an average of one hundred dollars on monthly Transportation costs which is best well if you don't watch much TV my recommendation would be to cut the cable cord there are other Digital streaming Solutions available at a fraction of the cost and once you've made the transition you're done that doesn't mean it's not a good idea to make your own food or bike more places in fact doing more of those things could also allow you to

32:06 contribute to your contingency fund or speed up future savings but committing to changing those daily habits requires consistent self-discipline to get the same bang for your buck and we know from The Matrix of competing needs not to make self-discipline our go-to financial plan but maybe you love television and cable is a high priority item in your life that's okay as you look at the options before you try to find whatever your equivalent of cutting cable would be in terms of the criteria above next ask yourself what would need to change in my lifestyle in order to implement this plan this is a form of capacity check that is often overlooked so for example if you're committing to cooking more you need to consider how that changes both your schedule and your grocery budget

32:55 what are ideas for some potential trouble spots like those nights when you come home tired and don't feel like making dinner next we ask what outside inputs would I need to meet this goal resource check do you need to ask your partner to take on additional household responsibilities if you cook more do you need information if I were to cut cable I would need to confirm beyond a shadow of a doubt that Netflix carries My Little Pony sometimes the resource we need is simply some accountability or encouragement from a friend as you consider your options jot down a word or two about what you need to give yourself the best shot at success but let's face it not every choice is as easy as cutting cable some goals may require sacrifices that cut deep into your comfort level

33:44 or perhaps even when you've identified all the options you can you still don't see a clear way to get yourself to a safe Financial place you just feel stuck in those times take a deep breath review your core Essentials and maybe watch the money as a trigger video One More Time Don't Close Your Eyes and give up focus on improving as opposed to solving do what you can to move yourself closer to the safety that is a balanced budget if you maintain awareness of your financial picture and keep looking for options you're giving yourself your best shot for spotting opportunity when it comes and that is what will allow you to achieve your financial goals now we've looked at how money comes in and goes out we've analyzed where we are with the 3s model

34:34 and gotten specific about how to reach the next stage in this video we'll focus on implementing our plan and creating a financial management routine that you can stick to the first thing you need is to put a time frame around the changes you decided to make in the last video when are you going to stop by the gym to cancel your membership Tuesday great any action that you identified from researching alternate data plans to updating your LinkedIn profile needs a time frame attached to it next we want to pick a method to organize and manage our cash flow this method should directly address the particular cash flow challenge you've identified either helping you pay better attention or else making it harder for you to slip up for example if you decided to set a lower amount for your out-of-pocket spending you could keep

35:22 practicing the daily tracking technique to notice when you're approaching your limit or you could put yourself on a cash budget for expenses in that category as far as which organizational method to choose there isn't one magical product or approach that works for everyone essentially all cash flow management is about three things reviewing what you've earned and spent predicting what's coming up and creating a plan to cover it what matters is that you pick an organizational method that you find intuitive visually engaging and that provides the level of detail you need to manage and track your progress whether you're an app spreadsheet or notebook kind of person really comes down to you one specific organizational tip that I recommend for those whose challenge is variable income is to maintain a robust contingency fund that's separated from regular monthly spending

36:12 consider putting your income directly into a high yield savings account and then at the beginning of each month transfer the funds you need for that month's expenses over into checking when you don't know when your next payday will come it's essential to prepare for dry spells by Saving aggressively and without this separation it can be very easy to overspend when money comes in making a lifestyle change is always easier when the people in our lives are supportive unfortunately that's not always the case often there are people who encourage us to spend on things that are not in our cash flow plan if we want to keep those people in our lives eventually we're going to have to address the situation I find the best way is to be positive and transparent instead of just saying I'm too busy to meet for lunch for the 10th time tell them what you're working toward I'm not doing meals out because I'm saving up

37:01 for holiday gifts or I'm paying off my debt by the end of the year if you're not comfortable sharing specifics it's fine just to say that's not in my budget this month but I do find that people are generally more supportive if they feel like they're helping you work towards something the Second Challenge is posed by those who are directly involved in our money who don't see the goal the same way that you do and boy is this a tough one but the truth is that people often have a very different view of what's reasonable and it doesn't mean that one person is wrong instead of bombarding your significant other with facts and figures open a dialogue share the emotional significance of what this means to you try saying I love you and I want to share a long life together I'm worried about our financial security if we don't get this under control

37:51 certainly much more engaging then you need to stop wasting money but by far the most important factor in successfully managing your cash flow is not saying the perfect thing choosing the best app or lining up a neat row of cash stuffed envelopes it's establishing a regular financial management practice when you're starting out I would suggest having a weekly money date with yourself somewhere between 30 minutes to an hour to review predict and plan after you get the hang of things you may find that a monthly set down is fine if this last one seems particularly tough remember your yes and and baby steps techniques stay focused modify where you need to but try to stay on that horse financial management is a form of regular self-care just like eating a balanced diet

38:37 and getting enough sleep you never get to be done eating or done with sleep you never get to be done with managing your money keep tinkering until you have the right method and the routine that you can stick with and then hopefully reaching your financial goals is just a matter of time money has a deep personal meaning that begins in childhood we experience money in a very physical way from our stress response when things are out of balance to the fast and slow ways that our brains execute decision making we've discussed how to sit with your feelings long enough to figure out what's happening with your money we've outlined how to gather the right information analyze it and make a decision to put a plan into practice we've addressed what it takes to change behavior and stick to it

39:28 but even the best plans are bound to run into trouble spots and that's completely normal we want to be careful about being too rigid or perfectionistic about this process there are lots of ways to deal with obstacles or get back on the horse when you fall off let's look at some common challenges and how to respond to them life did not go according to my financial plan congratulations you've discovered one of the fundamental truths about managing cash flow there's no such thing as a typical month or typical year something unexpected always comes up but since you never get to be done with money you always get the chance to keep adjusting make sure you're still going through the actions either each week or at least each month to review income and expenses predict what's coming up and make a plan to cover it many Financial ups and

40:18 downs can be fixed by increasing what's in your contingency fund if you keep finding yourself thrown by unforeseen events in your financial life it probably indicates that you're under preparing for life's curve balls go back to the analyze video and see if you need to revise your plan it's too hard I want to give up sometimes the change is necessary to bring money into balance are really difficult use time frames to figure out how long you'll stick out this particular Plan before exploring the next option use baby steps to find a modification like bringing down a certain expense by 25 even though you need to cut it in half to make your budget work also consider another capacity check and resource check sometimes people are working on too many different life goals at once and need to focus or they need to look for more support

41:09 also be positive and specific about your progress so far were you able to cut your monthly deficit down to just fifty dollars a month or save 700 this quarter when your goal was a thousand pat yourself on the back we tend to increase behaviors we feel good about so don't let an All or Nothing attitude drag you down I'm struggling to change old habits changing Behavior can take time and effort first try to be specific about where you're running into trouble is there a person or situation that's part of the issue if you're depending too much on self-discipline is there a way to decrease or avoid exposure to temptation maybe you need to adjust your organizational method and try something new like switching to cash if you've been tracking spending with an app until you have things on track make sure you're

41:57 still spending time on a weekly basis to review predict and plan my experience says if people can maintain regular awareness it makes it much more likely the behaviors will fall into line I'm good for a while but then I fall off the horse if for whatever reason you fall out of your Healthy financial management routine you can always always start again the practices in this course can be used as often as you need them that's why we call it the wheel of change because these steps can be used repeatedly to manage developments in your life gather your information about incoming expenses and see what's not working reassess what needs to change the good news is that you're not starting from scratch the more familiar these steps become the easier it will be to get back on the horse and to internalize those good with money behaviors for

42:47 the long term I hope that you're able to use these tools and your new awareness to not only meet your financial goals but to make money a positive purposeful and meaningful part of your life