There are two choices in personal finance. You can either be reactive or proactive.
I choose the latter. And this post will explain why proactivity will change your life in the best way.
Video Transcript
I love proactivity so much. I want to talk about it one more time.
But this evening is to be spent on being proactive and becoming a proactive Financial individual and the benefits of that.
Proactive Financial Individual
Putting off gratification in order to prepare for the uncertain future and be certain of how you will handle your financial future.
Figure out what's going to happen in the future [ IE the holiday season, anniversaries, holidays birthdays and registrations. All these are occasional things that you know are going to happen.
This is not for your car tire bursting on the side of the freeway. That's an emergency fund expense.
I'm talking about being proactive about things, you know are going to happen, but for some reason. most simply don't because it's not part of our daily or monthly repertoire.
Example: Your Next Vacation Costs $1200
$1200 / 12 months = $100
Super simple. $100 will be siphoned each month into a savings account. And then as those expenses occur, you use that savings account to pay for the expenses.
.You don't scramble, you don't use a credit card, you don't ask Mommy and Daddy for dinero, for money.
You're already prepared for it. Preparation proactivity and let me tell you that will seriously relieve stress just in that practice of preparing for those upcoming expenses.
That's being proactive. Preparing for everything.
Now what most people do is operate from a place of reactivity. 100% reactive. As things come up you deal with them and that's expenses occur. You take care of them then and that's what I believe causes. Most of Consumer Debt. It's not people going crazy Vacations or blowing it at a casino or buying alcohol [well, sometimes.]
I really do believe most people are well-intentioned and most people want things to be paid. They want to be on time with their payments.
Reactivity Begets Reactivity.
It's simple logic here. The more you are reactive the more reactivity will own your financial life. And that's a revolving cycle. Until you make a decision that says “I want to be proactive.” And you begin to take daily steps towards that because there are plenty people I speak with Coaching who talk about how much they want to be proactive.
But then we look back upon the last 90 days of what they did financially. Their actions are telling me “I'm okay with being reactive and I'm going to stay reactive but that's not what they truly want. So I implore you. Figure out what that productivity is if it's the figuring out that the upcoming expenses.
That's a really simple one super simple to implement.
Take everything, you know is going to happen divided by 12 put it into a savings account and don't touch it. Whether that means you have an online statement. Out of sight out of mind. This is what
This is what I do I make sure I don't touch my savings.
It immediately goes into a separate savings account [at regular times during the month] and my mint account is NOT connected.
So I actually don't know how much money I have in my savings.
The less you see the less. The less you're likely to spend it.
I mean unless you're super super super super responsible. I'm still working on the fruit of the spirit of self-control.
So if I know I have money it's likely that I will spend it. But for most for most people, put it in a place that you can't touch it.
I was talking to this coaching client and she was talking about putting credit cards in the freezer. She put her credit cards in a cup filled with water. This gives her time to think about every purchase.
That's quite extreme but it may work for you! Send me a picture if you do this. I want to have a good laugh.
I encourage you to become self-aware in your finances. If you know what your vices are and pitfalls are, great. If not, there are plenty of videos on this blog to help you with this.
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