Archive for January 2014

Money Talks – What does it say about you?

money talks in wood typeThe phrase “money talks” has been in use in some form or other for thousands of years. It’s one of those phrases that everyone knows. You probably first heard it as a young child and it’s stuck with you since then.

Most people associate it with power. Money talks, money makes things happen. But taken more literally, money can also tell a story. What story does your money tell about you?

Your checkbook is a personal journal

Flip through your checkbook or bank statement and look at all your transactions. What do those purchases say about you? Are you generous? Shallow? Thoughtful? Selfish? Wise? Foolish? Vain? Practical? If someone else read your checkbook, what would they think of you?

Wether we like it or not, how we use our money is a reflection on who we are and how we act.

After reviewing your checkbook are you comfortable with the picture it paints of you and the story it tells about you? Would you be embarrassed if someone else looked at it? Not because of how much or how little money you had, but of how you use your money.

Philosophy of money

If you’re uncomfortable with how you spend and use your money, one of the best questions you can ask yourself is: Is money the end goal? Or is it a means to an end—a tool?

Depending on how you answer, you may have some clearer direction on how to make changes to your money and how to re-write your checkbook going forward.

If you develop some clear goals of who you want to be and what you want to use your money for, the story your checkbook tells will be immediately different. If you decided that your goal was to take care of the people around you, you might start writing more checks to specific people to help them out or to charities for a similar result. There would be immediate evidence of the change.

There’s no particular “this is the best way to use your money.” It all depends on what you value. If your values and money use coincide, great. If not, you may be happier by making some changes.

Write a 2014 Challenge Letter to yourself

Business letter

Almost everyone makes New Year’s resolutions. In most cases, these are just a simple list of goals for the year. They get scratched out down on a piece of scrap paper and stuffed in a drawer, usually to be found years later.

That obviously doesn’t work very well if you’re interested in real change. It’s just a mind dump to make you feel better in the short-term. So what do you do if you really want this year to be different from the last?

The Challenge Letter

Instead of the normal list of resolutions, I’ve had a lot of success with writing myself challenge letters. These take a little more time an effort, but they’re well worth it because they actually work.

Try this: Take some time and think about what you want to accomplish in the New Year. What are the concrete results you want to achieve? What do you want to change? Why do you want those things? (I’ll get to the importance of “Why?” in a moment.)

Write yourself a letter that tells the story of your next year—all the things that are going to happen and how that makes you feel. Give it to a friend and have them mail or deliver it to you at the end of the following year.

The importance of “Why?”

When you’re coming up with your goals, be sure to ask and answer “Why?”. Why is buying a house important to you? Why do you want to learn to play the guitar? Why, really? Keep asking “Why?” until you feel like you’re at the root of the reason. Then ask “Why?” one more time to make sure you’ve gone as deep as you can go.

By focusing on “Why?” you’ll figure out what really matters to you and filter out a lot of the stuff you aren’t actually going to work towards. Be sure to include your answers to “Why?” in your letter. “I exercised three times a week this year because…”

The Results

What you’ll end up with is a more honest, more effective ruler to gauge your progress. If you wrote a list of resolutions and held onto it for the year, you might be able to use it hold yourself accountable, but a Challenge Letter tends to work better.

If you put in the time and effort to go through the exercise it’s likely you wrote down better goals than what you would write on a list of resolutions. They’ll be more closely tied to your values and  they’ll probably be more realistic.

If you’ve found a dependable friend to send you the letter, you’ll also be more likely to have it than the list of resolutions you scribbled down on a napkin.