Gaining Financial Clarity - Reflection for a Successful Year Ahead

Financial clarity. Financial fresh start. Whatever you want to term it, getting started is usually the hardest. Most of my clients come to me, they're overwhelmed, they're frustrated, they don't know where to start. And so getting clarity is the very first step. And knowing how much overwhelm and frustration there is in my clients when they first get to me, I've created a free financial clarity checkup available on my website. It's also down in the show notes that will help you walk through today's episode. even deeper, even more. I will reference it throughout the episode, but know that that resource is there. Also included in that resource is a free coaching one on one session for you after completion to help you find action. Sometimes we download stuff and we, you know, try to do it and we never are able to implement it. That one little key there. We'll hopefully help you be able to get some action, get some momentum and start moving forward. So go check that out. But today we are going to talk about how to reflect on last year to find clarity for this year. This is part one of a three part series. So I hope you will join me for this month as we dive deeper into gaining financial clarity and finding that next step. step. That will pretty much sum up those three episodes. I also will be holding a live masterclass going deeper into the subject and it's also available live where you could ask questions and be guided right on the spot. So. That is held January 26th, 3 p. m. Mountain Time. That is a Friday. Check out my website also for that monthly webinar. You can sign up and you will be notified of each month's webinar topic so that you're able to attend the ones that you would like to and the others that don't pertain to you, you can skip over. So, alright, let's dig in. Where do you start? Everything has a history, right? Everything is documented somewhere. So whether it's your bank statement, your credit card statement, your Venmo statement, wherever you are spending money, there is a history somewhere. Do I want you to print out all of those? No, I do not. But what I want you to do is I'm going to walk you through some questions but having told you where you can find the answers and you don't need to really, Visit all of your expenses, but you'll hopefully look at a couple of different time periods because what we do in the spring is different than what we do in the fall and the same with the summer and winter. We have periods of time where we spend more money just because that's the way it is. And clarity is all about learning these fluctuations, these patterns, the things we do, and the more and more time you spend with the money, the more clear you will get about your finances. Alright, so using those statements that I've talked to you about, the first area I want you to focus on is income. I want you to look at your income and As you think back or as you look back, right, these are deposits. These are going to be easy to see because there's definitely fewer income than there is expenses in anybody's budget. So, did you have a bonus last year? Did you have a windfall? A windfall can be a tax return. It's a one time payment. Maybe it's a refund from somewhere. What did you do with those? What did you do with that quote extra money? Because a bonus and windfall is extra money. Think about that. Get your clarity around those. What about a raise? Did you get a raise last year? And what did you do with it? Do you feel like you are spending at that raise level? To support your future. To support where you want to go. Really being aware of our income and where it's going, right? That's what we're doing today. But also in looking at your income, do you have a fluctuating income? Do you find that you're in a job, you're in a position where, you know, certain months it's low and other months it's high? And can those fluctuations support one another? Maybe, maybe you've got three months in spring that are low, but in fall you've got some high months. And if you learn how to, you know, kind of navigate those together, Knowing that you're going to need that fall for that next spring, that is what we want you to look for. That is what I want you to see as you're reviewing your income. And knowing what you're going to do with your bonus, what you're going to do with your tax return, what you're going to do with any extra money that comes your way, right? So, next is your expenses. This is the big area, right? This is where we need to be aware of. And what do you do? I don't want you to create categories with numbers and divide. So I am going to give you three areas for you to consider to explore on those statements. And then I will give you specific areas of certain places that you can also explore as well. So first off, I want you to think of an area with your money where you feel you do well, right? You're like, we're spending what we need, we're in line, I think that's great, you know? So identify one of those areas and I want you to explore that and make sure that it does fit in with, you know, that number is a feel well number like you're feeling right now. Tying those two together is important. The second area is one that you feel like you need to work on. Is there an area you're like, ah, I know I need to work on this. And then as you go explore it, maybe it's not as bad as you thought. You know, and maybe there is a little room for improvement. But until you actually, you know, calculate the numbers, see what you're doing every month, you just don't know. And then the third area, I would love for you to focus on an area you're curious about. There's no cause for concern or there's no feeling of like, Oh my gosh, this is so good. Just an area you're curious about. I had a client and she's like, Oh my gosh, I spent that much on groceries. So there's some of those areas that we know we need groceries. We know we need food, but do we know how much we're spending? And so bringing that awareness, is important to us to gain that clarity. This is not about blaming yourself, chastising yourself, you know, punishing yourself. This is just a moment where you're looking at the numbers. You're looking at these areas for different reasons, and there is no blame and no shame as we are doing this. So as you do those three areas, explore them, think about them. Could you do better? You know, could you do worse? Just really get in tune with those three areas. And as I said, I will share with you three areas that you can look at as specific, specific areas and maybe this will jar some ideas of some others that are more specific. A lot of people don't realize the total amount they are spending on subscriptions and memberships. It is so easy to sign up for this 5. 99, and this 2. 99, and this 11. 99, and in totality per month, we might well be up 100 to 200. I thought that's why we cut cable, right? To reduce that amount. So, add that up. Get that real number for you. It is okay if that's what you want to spend, but this exercise is all about the clarity. So go check those out. There are three areas in our lives that we exchange within one another. Time, energy, and money. So obviously in the discussions I have with you, it's about money. Spending money on some of these subscriptions and memberships probably give you more time and more energy, right? Hopefully supporting you higher in a different area of life. That is the trade off, is if I am going to spend 100 in streaming, or 100, this could also include, you know, meal subscriptions all sorts of things personal care items, whatever that is. Does that work for you? Does that serve the purpose? Does that exchange of money give you more energy and more time in another area? I Know I just signed up for a subscription this past year. I don't typically do subscriptions or do a lot of them, but my toothpaste Is that one store? I don't frequent that store. It's actually cheaper on Amazon, so I went with the subscription. I have only done one renewal, but just it worked out fine for me. So just being aware of those things and how they support you for me. I don't have to travel to that store by myself. You know, taking up my time. It comes right to me and it is actually cheaper than just buying it outright. So the second place you can think about is eating out and. I'm not saying you shouldn't, but I just want you to know what you're spending. What is that trade off? If you are foregoing the time of fixing meals, what is that time traded for, right? You're eating out to make it quicker, easier, saving you time, but is that time supporting you better in a different area of life? So, you know, just thinking about it more in the dollar sense, not just the dollar sense, I mean but exploring it through. Supporting time, energy and money and the final category I have for you is entertainment. So, you know, there's lots of things we do weekly or monthly, but I know a lot of my clients come to me wanting to create family experiences, and these are at a higher level. But if we're if we're wanting that, but we're you You know, always doing that weekly or that monthly experience, like maybe there's that shift. Maybe we can change that entertainment to a bigger annual and forego the weekly or the monthly. So just being aware of it, just knowing, just learning, just educating yourself. So, explore those areas thoroughly. Don't blame yourself and don't get hung up on them either, right? We have a few more areas we're going to help you be able to get more clarity and find a way to get moving forward. Alright, so the next section is What did you add new last year? Was there a new habit, a new system? For example, did you try a new budgeting method? Did it work? Did it not work? Why didn't you like it if it didn't work? Or, you know, all of the things, explore that. Maybe it did work well. Maybe there's another challenge you're experiencing. Maybe you set up bills on autopay. And you love it, right? That's a financial win. What about automatic savings? Same thing. So explore your money routines, your money habits, your money systems. What has worked well? Because what has worked well, you need to acknowledge it. It is a financial win. It's what's going to keep you moving forward, right? We're talking a money marathon, not a money sprint. So these little wins help us gain that realization that we are moving down the right track, right? We are seeing things we may not be paying off loads and loads and loads of debt, but we are doing automatic savings or we are doing automatic bill pay. And that has relieved our stress at that level, right? Recognizing that for what it is so important. Also explore what financial milestones have you hit. Okay? Did you pay off a credit card? Did you pay off a loan? Maybe you got it halfway paid off. Maybe you're seeing as this year is going to happen. Those are milestones. Celebrate those. Be excited about those and keep, keep going. Recognize your financial strengths. What do you do well with budgeting? What do you do well with savings or even debt? What is it you do well? I know a lot of people are like, I just don't, I'm just not good at money. And that's not true. You just haven't found what's worked for you. So keep thinking through these things. And I love to say when you do find something that works, can you replicate it somewhere else? Can you double down on that? Can that be your lean in moment for getting you to get closer more quickly and then open up other areas, right? You know, just getting there and doing it and exploring it. So don't forget to explore what worked well, right? So now we're going to move into the little opposite areas, right? We're going to find areas for improvement. We all have areas for improvement. This was my step in my financial journey that propelled me and it took a lot of time. So I want you to understand that while you do this and you find an improvement area, You're going to repeat it. You're going to want to keep repeating it throughout the year, throughout the years moving forward, but you're going to think about was there any overspending? Okay, we overspent. Everybody does, me included, right? We have our extra spending, right? If you don't want to call it overspending moments, but determining the reason why, right? Thinking about it. It is, is it tied to something you just need to plan better? So thinking about that, where was that happening? Why was that happening? Is that something you need to change? Or is it something you just need to plan better for? Here's a big one. This one is definitely one if, if you just do this, you will be one step better than you were in the past year. What unexpected expenses happened last year? What do you as you look through there, you're going to see those they're going to be an anomaly throughout the months, right? Not necessarily emergency, but those expenses that you're like, Oh, my gosh, there was that vet bill or Oh, my heck, I forgot about car registration or, you know, whatever it is, what expenses had you feeling like they were unexpected, that they were a surprise? And how can you plan better for those in 2024? Right? Even just looking through your 12 months of statements for things like that and then making a plan to handle those better. That is a huge, huge step. So if that's the only action you take from this episode, I want you to go do that. So very important. Then just thinking overall. What didn't work from your budgeting perspective. I think a lot of us want to be really good with our money. And so we go extreme right without excitement with the momentum of setting up that budget. But really, is it working? Why is it not working? Is it just Maybe not being reality. It's not what it is. Some people like to, you know, cut back on certain areas, but then it's not possible because of reality. I've seen people try to pay for a vacation by cutting back their grocery expenses. If you don't know what you need to spend on groceries and That is your lowest limit. You can't pay for a vacation off of cutting your groceries. That will only cause you stress, heartache, frustration, right? Exactly what my clients come to me feeling. Alright, so in a nutshell that gives you a financial clarity review. I have two questions for you to dive deeper. The first one is, what, what are, what of your expenses are your top three? I do not want to do life without three's three expenses. And I'm talking the expenses outside of your necessities. So outside of your shelter, your warmth, your food, your transportation to work, right? The extras. What three do you value the most? And you would be like. These three I need to have. And in a way, I like to Marie Kondo it, what, what brings you the most joy and then on the flip side of that, what bottom three expenses would you be like if they were gone, I could care less like recognizing that about your expenses is a whole new view. Right. And that's what clarity is all about is looking at your expenses with a different lens with a different filter. So. You have, you know, probably 20 to 25 expenses. And you've got your top three and you've got your bottom three and everything in the middle, right, can also be prioritized. Once you start seeking your expenses that way, it just opens up what you're able to do with your money. Financial clarity. Financial fresh start. Whatever you want to term it, getting started is usually the hardest. Most of my clients come to me, they're overwhelmed, they're frustrated, they don't know where to start. And so getting clarity is the very first step. And knowing how much overwhelm and frustration there is in my clients when they first get to me, I've created a free financial clarity checkup available on my website. It's also down in the show notes that will help you walk through today's episode. even deeper, even more. I will reference it throughout the episode, but know that that resource is there. Also included in that resource is a free coaching one on one session for you after completion to help you find action. Sometimes we download stuff and we, you know, try to do it and we never are able to implement it. That one little key there. We'll hopefully help you be able to get some action, get some momentum and start moving forward. So go check that out. But today we are going to talk about how to reflect on last year to find clarity for this year. This is part one of a three part series. So I hope you will join me for this month as we dive deeper into gaining financial clarity and finding that next step. step. That will pretty much sum up those three episodes. I also will be holding a live masterclass going deeper into the subject and it's also available live where you could ask questions and be guided right on the spot. So. That is held January 26th, 3 p. m. Mountain Time. That is a Friday. Check out my website also for that monthly webinar. You can sign up and you will be notified of each month's webinar topic so that you're able to attend the ones that you would like to and the others that don't pertain to you, you can skip over. So, alright, let's dig in. Where do you start? Everything has a history, right? Everything is documented somewhere. So whether it's your bank statement, your credit card statement, your Venmo statement, wherever you are spending money, there is a history somewhere. Do I want you to print out all of those? No, I do not. But what I want you to do is I'm going to walk you through some questions but having told you where you can find the answers and you don't need to really, Visit all of your expenses, but you'll hopefully look at a couple of different time periods because what we do in the spring is different than what we do in the fall and the same with the summer and winter. We have periods of time where we spend more money just because that's the way it is. And clarity is all about learning these fluctuations, these patterns, the things we do, and the more and more time you spend with the money, the more clear you will get about your finances. Alright, so using those statements that I've talked to you about, the first area I want you to focus on is income. I want you to look at your income and As you think back or as you look back, right, these are deposits. These are going to be easy to see because there's definitely fewer income than there is expenses in anybody's budget. So, did you have a bonus last year? Did you have a windfall? A windfall can be a tax return. It's a one time payment. Maybe it's a refund from somewhere. What did you do with those? What did you do with that quote extra money? Because a bonus and windfall is extra money. Think about that. Get your clarity around those. What about a raise? Did you get a raise last year? And what did you do with it? Do you feel like you are spending at that raise level? To support your future. To support where you want to go. Really being aware of our income and where it's going, right? That's what we're doing today. But also in looking at your income, do you have a fluctuating income? Do you find that you're in a job, you're in a position where, you know, certain months it's low and other months it's high? And can those fluctuations support one another? Maybe, maybe you've got three months in spring that are low, but in fall you've got some high months. And if you learn how to, you know, kind of navigate those together, Knowing that you're going to need that fall for that next spring, that is what we want you to look for. That is what I want you to see as you're reviewing your income. And knowing what you're going to do with your bonus, what you're going to do with your tax return, what you're going to do with any extra money that comes your way, right? So, next is your expenses. This is the big area, right? This is where we need to be aware of. And what do you do? I don't want you to create categories with numbers and divide. So I am going to give you three areas for you to consider to explore on those statements. And then I will give you specific areas of certain places that you can also explore as well. So first off, I want you to think of an area with your money where you feel you do well, right? You're like, we're spending what we need, we're in line, I think that's great, you know? So identify one of those areas and I want you to explore that and make sure that it does fit in with, you know, that number is a feel well number like you're feeling right now. Tying those two together is important. The second area is one that you feel like you need to work on. Is there an area you're like, ah, I know I need to work on this. And then as you go explore it, maybe it's not as bad as you thought. You know, and maybe there is a little room for improvement. But until you actually, you know, calculate the numbers, see what you're doing every month, you just don't know. And then the third area, I would love for you to focus on an area you're curious about. There's no cause for concern or there's no feeling of like, Oh my gosh, this is so good. Just an area you're curious about. I had a client and she's like, Oh my gosh, I spent that much on groceries. So there's some of those areas that we know we need groceries. We know we need food, but do we know how much we're spending? And so bringing that awareness, is important to us to gain that clarity. This is not about blaming yourself, chastising yourself, you know, punishing yourself. This is just a moment where you're looking at the numbers. You're looking at these areas for different reasons, and there is no blame and no shame as we are doing this. So as you do those three areas, explore them, think about them. Could you do better? You know, could you do worse? Just really get in tune with those three areas. And as I said, I will share with you three areas that you can look at as specific, specific areas and maybe this will jar some ideas of some others that are more specific. A lot of people don't realize the total amount they are spending on subscriptions and memberships. It is so easy to sign up for this 5. 99, and this 2. 99, and this 11. 99, and in totality per month, we might well be up 100 to 200. I thought that's why we cut cable, right? To reduce that amount. So, add that up. Get that real number for you. It is okay if that's what you want to spend, but this exercise is all about the clarity. So go check those out. There are three areas in our lives that we exchange within one another. Time, energy, and money. So obviously in the discussions I have with you, it's about money. Spending money on some of these subscriptions and memberships probably give you more time and more energy, right? Hopefully supporting you higher in a different area of life. That is the trade off, is if I am going to spend 100 in streaming, or 100, this could also include, you know, meal subscriptions all sorts of things personal care items, whatever that is. Does that work for you? Does that serve the purpose? Does that exchange of money give you more energy and more time in another area? I Know I just signed up for a subscription this past year. I don't typically do subscriptions or do a lot of them, but my toothpaste Is that one store? I don't frequent that store. It's actually cheaper on Amazon, so I went with the subscription. I have only done one renewal, but just it worked out fine for me. So just being aware of those things and how they support you for me. I don't have to travel to that store by myself. You know, taking up my time. It comes right to me and it is actually cheaper than just buying it outright. So the second place you can think about is eating out and. I'm not saying you shouldn't, but I just want you to know what you're spending. What is that trade off? If you are foregoing the time of fixing meals, what is that time traded for, right? You're eating out to make it quicker, easier, saving you time, but is that time supporting you better in a different area of life? So, you know, just thinking about it more in the dollar sense, not just the dollar sense, I mean but exploring it through. Supporting time, energy and money and the final category I have for you is entertainment. So, you know, there's lots of things we do weekly or monthly, but I know a lot of my clients come to me wanting to create family experiences, and these are at a higher level. But if we're if we're wanting that, but we're you You know, always doing that weekly or that monthly experience, like maybe there's that shift. Maybe we can change that entertainment to a bigger annual and forego the weekly or the monthly. So just being aware of it, just knowing, just learning, just educating yourself. So, explore those areas thoroughly. Don't blame yourself and don't get hung up on them either, right? We have a few more areas we're going to help you be able to get more clarity and find a way to get moving forward. Alright, so the next section is What did you add new last year? Was there a new habit, a new system? For example, did you try a new budgeting method? Did it work? Did it not work? Why didn't you like it if it didn't work? Or, you know, all of the things, explore that. Maybe it did work well. Maybe there's another challenge you're experiencing. Maybe you set up bills on autopay. And you love it, right? That's a financial win. What about automatic savings? Same thing. So explore your money routines, your money habits, your money systems. What has worked well? Because what has worked well, you need to acknowledge it. It is a financial win. It's what's going to keep you moving forward, right? We're talking a money marathon, not a money sprint. So these little wins help us gain that realization that we are moving down the right track, right? We are seeing things we may not be paying off loads and loads and loads of debt, but we are doing automatic savings or we are doing automatic bill pay. And that has relieved our stress at that level, right? Recognizing that for what it is so important. Also explore what financial milestones have you hit. Okay? Did you pay off a credit card? Did you pay off a loan? Maybe you got it halfway paid off. Maybe you're seeing as this year is going to happen. Those are milestones. Celebrate those. Be excited about those and keep, keep going. Recognize your financial strengths. What do you do well with budgeting? What do you do well with savings or even debt? What is it you do well? I know a lot of people are like, I just don't, I'm just not good at money. And that's not true. You just haven't found what's worked for you. So keep thinking through these things. And I love to say when you do find something that works, can you replicate it somewhere else? Can you double down on that? Can that be your lean in moment for getting you to get closer more quickly and then open up other areas, right? You know, just getting there and doing it and exploring it. So don't forget to explore what worked well, right? So now we're going to move into the little opposite areas, right? We're going to find areas for improvement. We all have areas for improvement. This was my step in my financial journey that propelled me and it took a lot of time. So I want you to understand that while you do this and you find an improvement area, You're going to repeat it. You're going to want to keep repeating it throughout the year, throughout the years moving forward, but you're going to think about was there any overspending? Okay, we overspent. Everybody does, me included, right? We have our extra spending, right? If you don't want to call it overspending moments, but determining the reason why, right? Thinking about it. It is, is it tied to something you just need to plan better? So thinking about that, where was that happening? Why was that happening? Is that something you need to change? Or is it something you just need to plan better for? Here's a big one. This one is definitely one if, if you just do this, you will be one step better than you were in the past year. What unexpected expenses happened last year? What do you as you look through there, you're going to see those they're going to be an anomaly throughout the months, right? Not necessarily emergency, but those expenses that you're like, Oh, my gosh, there was that vet bill or Oh, my heck, I forgot about car registration or, you know, whatever it is, what expenses had you feeling like they were unexpected, that they were a surprise? And how can you plan better for those in 2024? Right? Even just looking through your 12 months of statements for things like that and then making a plan to handle those better. That is a huge, huge step. So if that's the only action you take from this episode, I want you to go do that. So very important. Then just thinking overall. What didn't work from your budgeting perspective. I think a lot of us want to be really good with our money. And so we go extreme right without excitement with the momentum of setting up that budget. But really, is it working? Why is it not working? Is it just Maybe not being reality. It's not what it is. Some people like to, you know, cut back on certain areas, but then it's not possible because of reality. I've seen people try to pay for a vacation by cutting back their grocery expenses. If you don't know what you need to spend on groceries and That is your lowest limit. You can't pay for a vacation off of cutting your groceries. That will only cause you stress, heartache, frustration, right? Exactly what my clients come to me feeling. Alright, so in a nutshell that gives you a financial clarity review. I have two questions for you to dive deeper. The first one is, what, what are, what of your expenses are your top three? I do not want to do life without three's three expenses. And I'm talking the expenses outside of your necessities. So outside of your shelter, your warmth, your food, your transportation to work, right? The extras. What three do you value the most? And you would be like. These three I need to have. And in a way, I like to Marie Kondo it, what, what brings you the most joy and then on the flip side of that, what bottom three expenses would you be like if they were gone, I could care less like recognizing that about your expenses is a whole new view. Right. And that's what clarity is all about is looking at your expenses with a different lens with a different filter. So. You have, you know, probably 20 to 25 expenses. And you've got your top three and you've got your bottom three and everything in the middle, right, can also be prioritized. Once you start seeking your expenses that way, it just opens up what you're able to do with your money.