In our previous article, Track Your Spending and Improve Your Financial Life, we discussed ways to track your spending and a method to help you identify your values utilizing United Capitals’ HonestConversations® exercise. Step number 4 of the 10 Steps to Transform Your Financial Life is to Stop the Leaks.
First, assess your spending habits. Don’t make yourself or your partner feel bad about them. Your habits are just that, habits. And you don’t necessarily need to change your spending habits if you feel comfortable with where your money goes. Is your money flowing in the same direction as your values or is some of your money being allocated to things that are not important?
Think about ways in which you could improve the outflow of money. Talk about it with your partner. Discuss how you feel when you are able to see that you have more money coming in than going out AND you are saving for things that are important to you. Write down the things that are important to both of you individually, and as a couple. What could your money do for you if you are being more conscious about where your money is going?
What I have found is that many people have an outflow of money for things they don’t even use or need. One of my past times is wine tasting at various wineries in the Northern and Central Coasts of California with friends. If we love the wine and atmosphere it’s inevitable that one of us will sign up for the wine club. This way we can all enjoy the perks in addition to the wine! Before long, our wine refrigerators are full and there are several quarterly charges on our credit cards. We enjoy wine tasting but it is not important for us to remain members of wine clubs we don’t visit. This gives us an opportunity to get together and evaluate which clubs to keep and which to let go, at one of our favorite wineries of course!
Do you have subscriptions for duplicate items like music aps or memberships you intended to use but never do. We often over pay for TV and cell phone services which could be negotiated down with just a phone call.
Action steps you could take right now:
Pay attention to your money mindset around this step, and each step of the way. Be aware of how you are feeling and what your thoughts are around this. Are you feeling blocked? Ask yourself why you feel the way you do around this area and see if you can flip any negative thoughts to positive thoughts.
I look forward to sharing more value in step 5 of the 10 steps to transform your financial life.
References and Further Reading
United Capital, a Goldman Sachs Company. (2019). Understand What’s Important to You from https://www.goldmanpfm.com/financial-life-management/goal-based-investing
Bond, C. (2019). 4 Steps to Lower Your Credit Card Interest Rate from https://creditcards.usnews.com/articles/steps-to-lower-your-credit-card-interest-rate
United Capital Financial Advisers, LLC d/b/a Goldman Sachs Personal Financial Management (“GS PFM”) is a registered investment adviser and an affiliate of Goldman Sachs & Co. LLC and subsidiary of The Goldman Sachs Group, Inc., a worldwide, full-service investment banking, broker-dealer, asset management, and financial services organization.
The information contained herein is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered investment advice. GS PFM does not provide legal, tax, or accounting advice. Clients should obtain their own independent legal, tax, or accounting advice based on their particular circumstances. Please contact your financial adviser with questions about your specific needs and circumstances.
Information and opinions expressed by individuals other than GS PFM employees do not necessarily reflect the view of GS PFM. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice.