Personal responsibility and sound money management go hand in hand.
At 45 years old, the anonymous author of the article – a father of four – didn’t have a penny saved in the bank. And he decided it was time to get serious about his finances.
First of all, I commend the author for taking charge of his money management. It’s something we all need to do. And better to take charge at age 45 than at 55 or 65.
After meeting with his financial planner, however, the author concludes that his religion (my religion – although I “do Jewish” spending a little differently) is costing him too much money.
Since I live in Israel where school fees and synagogue dues are significantly lower, it’s not my place to comment on the cost of Jewish infrastructure in the US. So let’s leave that aside.
Because what really bothers and upsets me is that the author, as he changes his lifestyle and makes different choices, blames religion for his financial mess.
As if, for the last 20 years, he was a mere pawn in the money game without the freedom to spend and save his money differently.
Nobody plans to fail. They fail to plan.
Rather than take personal responsibility for his poor financial choices and lack of money management, the author makes religion the fall guy for 20 years of excesses and poor financial planning.
Money Management and Personal Responsibility
My goal isn’t to shame the author. I realize that very few of us learned sound money management skills when we were growing up.
And on top of that, we live in a world dominated by a multi-billion dollar advertising industry that uses sophisticated consumer psychology to convince us to buy more and more and more.
Instant gratification rather than the virtue of patience is championed.
It takes awareness, strength and resilience to do things differently.
Coupled with acceptance and ownership of our mistakes.
But, disappointingly, the author says nothing about what HE could have done to make more responsible financial decisions along the way.
My New Year’s Plan for Personal Responsibility and Money Management
This week, on Wednesday evening, my family and I together with Jews all over the world will usher in Rosh Hashana, the Jewish New Year – a time of hope and new beginnings.
This is the perfect opportunity to reflect on the year gone by.
To acknowledge the financial mistakes we’ve made.
And make a fresh start.
Because when we wise up and take responsibility for our actions, we become the captains of our ship.
We develop greater confidence and self-esteem.
We create change.
Here are my top 5 steps for taking personal responsibility for your money management so you can create a sustainable financial future for yourself and your family:
We’re human. And sometimes we make wrong choices. And even though we can’t turn back the clock, we can accept our mistakes and learn from them.
Acknowledge that every step of the way you were doing the best you could with the resources and the tools you had available.
To err is human. To forgive is divine.
Let’s take acceptance one step further.
Because guilt, shame and remorse over our financial foibles can clutter our thinking. Potentially, even paralyzing us from taking action.
But when you forgive yourself, you let go. You put down the burden and enable yourself to move forward freely.
You open yourself up to change.
3. No more comparisonitis
Too many people come into my office and wonder aloud how everyone else is making it. “These neighbors are going on vacation, again. Those guys have a new car. And those folks have the fanciest and most fashionable clothes.”
Or at least that’s what we see.
From the outside looking in.
And whether they do or whether they don’t have their financial act together – it doesn’t really matter.
Focusing on them distracts you from your own unique set of financial circumstances. Use your time and your energy to make your money management the best that it can be.
4. Plan your finances
If you’re really ready to forgive your financial mistakes and move forward, then you need a plan. A plan to take you from where you are today to where you want to be financially in the future.
Start by asking yourself what your future looks like:
Do you want to get out of debt, start a financial freedom fund or build your retirement next egg? Are you saving up for a down payment on a house?
Do you need to spend less than you earn or do you simply need to earn more?
Write down your goals and ask yourself: how much money will I need and what should I set aside each month to achieve my goals? Do I need to explore investing to grow my money?
This is the beginning of your financial plan.
5. Take Action
A plan is only as good as the paper it’s written on. To get results you need to take action.
Sometimes it’s hard to get started and sometimes it’s hard to keep going.
Start with the tiniest baby step you can take today to get you one step closer to your goal.
Open up that financial statement that you stuffed into the drawer; call your bank to check the balance on your account; or, make an appointment with your accountant to file last year’s taxes.
If you’re really challenged you might need an accountability partner or a financial coach to hold your hand and support you in achieving your financial goals.
Regardless of where you are today, the key to sound money management is personal responsibility, having a plan, and taking action.
So let’s get going.
I believe in you.
And wish you a sweet and prosperous New Year.
Shana Tova u’Metuka.