The power of money mindset rituals
“A ritual is something done repeatedly with a purpose outside of the action itself”
Have you ever felt stressed when an unexpected expense comes up? Has a year gone by where you were not really sure where all your money went? Do you have arguments with yourself or with your spouse over money? Do you wonder if you will have enough money to live a happy retirement?
Canadians have ranked money as their greatest cause of stress in life (more than personal health, work and relationships) according to the latest chapter of the Financial Stress Index, by FP Canada™. Consistent with previous years, in 2020, money was the number one cause of stress for Canadians (38%). Outranking personal health (25%), work (21%) and relationships (16%). And given the non-financial stressors related to pandemic this data becomes particularly significant.
I want to share a personal story of the money mindset rituals my husband and I put in place a number of years ago that changed our relationship and outlook on money. These rituals are something that have evolved with us over time and will continue to evolve! But what I can say is they have helped us stick to a plan, stay focused and ultimately relieve money stress.
Let’s go back a number of years to share how this all got started.
Sean and I were in our 20s when we met. I had 2 children from a prior marriage. Both of us were starting our careers in the financial services business both working our butts off in entry level jobs focusing on advancing our careers. At that time, we also both had second jobs to try to make a little extra income to support our new life together. Happy couple in our 20s with 2 kids but with lots of general expenses, only moderate incomes and small savings. So when anything unexpected came up, we felt it...we were stressed. We always managed to figure it out, but there were certainly moments when we weren’t sure how we were going to make it all work.
Step one…the power of a great budget
Enough was enough - we were done feeling uncertain over our money picture, so we decided to take one step forward - we needed a budget to have true clarity on our money story. We built our budget template in excel (no cool apps at that time) and it tracked everything! Money coming in, bills & expenses going out...and of course a summary to give us the reality check of whether we were in the black or red (you don’t want to see red). Over the years we have modified the template, but we still use it to this day and it is part of one of our rituals which I will go into in Step five.
One of the most valuable things we did with our budget was estimate our monthly “spending” - so the regular expenses like gas, groceries plus dinners out, entertainment, new clothes/shoes/makeup, all the stuff. We decided to make this amount conservative and we were forced to stick to it each month. At times, it truly felt like we had no money because we strictly allocated our money to other things that were important in our life (see Step four). This ensured we only saw this “spending” money in our daily banking. It forced us to make choices on what we did because there was only so much money for that kind of stuff. Getting a great budget in place gave us the clarity we needed to get really mindful about our money story and make purposeful decisions about our money.
Moving this forward
~ Choose a method to track your budget - spreadsheet or budget app. Check out this article on various budget apps or if you want a copy of the budget template I have used for years just reach out and I will send you a copy!
~ Check in on your budget at least monthly...take time to reflect & make tweaks
Step two…money conversations & creating the vision
This step is all about exploring your money story and digging in on what you can do to make it the money story you can be proud of. What is most important right now? What do you need to get in place for the future?
Now, this is the really fun part - maybe I think it is so much fun because I am in the financial business and I am totally passionate about navigating this part of the money journey. One tip I will give you, is to dedicate time for this kind of conversation. Whether it is a conversation with yourself or as a couple; this requires openness and listening to each other’s dreams, wants, worries, fears. And remember, each person brings a money mindset into any relationship - what is their past with money, is talking about money easy or hard, is one more educated on money or finance topics? Take this slow and be sensitive to each other or to yourself. My husband and I certainly had some interesting discussions over the years but ultimately these conversations allowed us to become more mindful and make informed decisions about our money.
Moving this forward
~ Book time in your calendar...and try a fun location to do this thinking
~ Write down your vision, what’s important to you, what you see in the future. ( you can use the Getting Mindful questions that I posted in our social groups as a starting point)
~ Also write down the list of actions or things you want or need to put in place. At this point, I would categorize them as things you should get some professional advice on and things you can do on your own.
Step three…get help!
Maybe at this point, you don’t have clarity on how it all fits together, or whether you are on a good path or possibly there are some specific money things you are worried about. What should you do first and what will be the impacts of these decisions...these are just some of the questions professional advice can help you with. The guidance alone can help you figure out what feels right for you and ultimately make decisions that will reduce some of these stressors.
Now, my husband and I have always believed in professional advice, even though we are both in the financial services business and knowledgeable. We have always had an advisor to lean on and to work with us on our plan. The value to us was the ability to share our thoughts and gain different perspectives and ultimately implement solutions that gave us peace of mind and comfort. This step is all about implementing solutions to achieve your goals. Getting things organized, automated and in place so you can have confidence throughout the year and beyond.
Oh and when seeking out professional advice don’t just think about the saving or investing side, also consider how you are protecting your hard earned money and savings. Advice and solutions to ensure your plan stays on track in the event of the unforeseen is so important to the conversation! So don’t skip out on how insurance can help you keep your plans on track.
Moving this forward
~ Have your list of things you would like some advice on
~ Book time with your Financial Advisor or if you don’t currently work with anyone ask a friend, I’m sure they will share a name if they work with someone great
Step four…clean up & automate
You will either love this or hate this, but it is one of the keys to being smart with your money & can do so much good to reduce the everyday money stress! And you and only you can tackle this stuff. Now, I am a super planner / organizer so the idea of “editing” my budget or setting up an automated savings plan for the stuff we agreed was important to us makes me giddy (ie saving for a trip, kids sports & activities, our Christmas fund...yes, we do budget monthly for our Christmas spending). I feel like I could do a whole workshop on just this step (maybe someday)!
Coming out of your money conversation, this is where you may have realized that you don’t feel great about how much you spend on all those subscriptions - netflix, disney+, crave...Or you feel like your dinners out are too frequent or you get stressed about Christmas spending each year. These are all things that you should write down as you are really digging in through the budget & money conversation steps. And you may come out of your “think time” with a big overwhelming list. It’s okay - just promise me that you won’t throw out the list or run away from the list:) Just chunk it down over a number of months. Maybe this month you work on reviewing all of your subscriptions and cancelling the ones you don’t really love. The following month you call Rogers to reduce that nasty high bill. Then you set up an automated saving plan for your Christmas budget:) If you are just embarking on this, it may take some time to get set up but once it is in place, it will bring you clarity & joy! Yes Joy!
Moving this forward
~ Get organized - save your budget spreadsheet in a place where you and your partner can access it or both download the budget app
~ Bring out that list, highlight your priorities and chunk down your actions
~ Get started - edit your budget, automate savings for things that create stress in your life and set spending goals if you need to
~ High interest savings accounts can be a great tool for automating your short term savings - ie) Christmas fund, Kids sports costs, Tax account!
Step five... make it a ritual
I can’t stress how important this step is. This is where the magic happens. It is where you make your money story a priority in your life.
It’s about the journey and the destination - let’s ditch the stress, ditch the money guilt, ditch the arguing and instead own this! Don’t worry if this takes time...be proud of yourself for taking a step to creating the money story you want. And give yourself the opportunity to enjoy the journey and adjust as your journey unfolds.
So what does this look like in practice. Here are my personal money mindset rituals:
1) Monthly All Things $ - we have one Sunday morning a month booked in our calendars to talk all things money. We grab a coffee, put on some mellow tunes and sit in the office together. It is a relaxed and judgement free zone. We review our budget, our spending, how we feel about the month. Also, what’s coming up this month, do we have funds allocated to everything...kind of anticipating the month ahead. This gives us a chance to reset on anything we aren’t feeling great about or to celebrate when we feel super great about our month on the money front. Good or bad we walk away from this time being more mindful and mindful together:)
2) Annual Money Jam! - typically we have done this close to the end of the year, so we can reflect on the past year and talk about the important things in the year ahead that are important to us that will need money. We basically do a quick review of each step annually to ensure we have a budget we are happy with and the right actions in place to get closer to our goals & vision.
Moving this forward
~ Build some money rituals into your life
~ Make it fun!
~ Book these in your calendars and be fully present during these times
Final thoughts…there is no right or wrong or a cookie cutter recipe for success. I have shared my journey with you, but you need to find what works for you. The important thing is that you try a few things and see if they give you clarity, comfort and confidence. You will feel so incredibly empowered when you dig in and write your money story!
Follow along @inspiredbytru on Instagram or @inspiredbytru on Facebook for upcoming tips for each of these steps.