Google “financial moves to make before the end of the year” and you will get a number of great articles about specific things you can do to improve your money situation going into next year. This is not an article like those.
Instead of writing that kind of blog post, I’m going to give you a few things to think about as you close out 2015. I’m want to talk about change, because the only certainty about having a financial plan is that it’s going to change over time. In fact, I kind of think of what I do as a financial planner, as being a change management coach who just happens to work with money.
Because our brain expects things to stay the same, change brings about fear and anxiety in many people. Even if you do everything you can do to control what’s happening around you, there is a LOT you do not have control over. It’s impossible to avoid change, so thinking about it ahead of time, and picturing yourself and planning how you would respond, helps prepare your brain for it and can reduce your fear and anxiety when you actually experience it.
So when you look forward to 2016, I suggest you think of the following three items and how they might affect your financial life.
Think about the family changes coming in 2016 that affect your money. Do you have a child starting school that will leave extra money in your pocket that used to be spent on daycare? Do you have a child going to college that will stress the budget in ways that daycare never did? Are you planning to expand your family and can’t imagine what that will do to your budget? Will you have to care for aging parents or pitch in to help a sibling or a friend?
Family changes that leave extra money in your pocket are a great time to direct some of it into goals for the future that you weren’t able to fully fund before, or increase that emergency savings that will get you out of a tight spot in the future. Don’t let that spare change just get eaten up by lifestyle inflation!
If your budget is taking a hit because of change, planning ahead of time can help you have options when you need them, instead of scrambling at the last minute. Don’t discount the value of at least knowing where you are today financially. Acknowledging that, and what might need to be adjusted, gives you time to get past the fear and make better decisions.
Let’s face it, many of you won’t end next year with the same job/career you have going into it. Some of these changes are out of your control – your company is bought/sold, a reorganization happens, you are laid off, etc. Some of them you actively influence like getting a promotion, switching companies, or changing careers entirely. Regardless, the change brings about some financial impacts that can be planned for, and some that can’t until they happen.
Again, think about areas that are within your control – your skills and your network, for example, to help you through those transitions you weren’t expecting. Non-financial tools like skills and networking can easily translate into positive financial outcomes if you leverage them. Having a financial plan in place, or putting one into place during a transition, can help you evaluate the leverage you need.
Even changes you bring about have a host of financial impacts. Consider checking out my job change checklist for financial items you might want to think about before, during, and after a move.
Your Relationship with Money
How do you view money? Do you see it as a necessary evil and try to avoid it? Do you see it as dictating your life and narrowing your choices? Or do you see it as a tool that can be used to improve your life, give you inspiration, and help you reach your goals? I challenge you to think about changing YOURSELF in 2016 if you answered “yes” to views 1 or 2.
When you start to view money as a tool, you will then feel free to use it to help you save time (hire someone to do things you don’t want to), take care of yourself (get a massage or buy healthier food), and inspire your future (take a course to prepare yourself to change careers). When you view money as a tool, you view your financial plan as your tool belt, with a constantly changing array of gizmos to tackle any challenge that comes your way.
The great thing about what I do, is that I get to help you through all of these changes I mention above and help you pick the right gizmos for your belt. I can help you prepare for change before it happens, and manage through it while it’s going on. I can help provide objectivity, and challenge you with questions you may not have thought of. I can be your accountability partner that reminds you why change is good especially when it doesn’t seem easy.
2016 is not going to be the same as 2015. I promise you. Be prepared when change happens!