“Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.” ~ James W. Frick
“I want to start investing in the stock market. How do I know when is the right time to start?”
A young professional woman in her early forties asked me this question recently and it turned out to be a long conversation about her overall financial wellness. Although she enjoyed a nice income from her current job, she accumulated rather significant credit card debt, was paying high rent for her apartment and had car loan payments. Her efforts to keep up with managing her financial responsibilities were causing her stress and anxiety. Hearing how much other people make in the stock market made her feel that finding ways to invest in the stock market will help her make money and pay off her debt faster.
I realize that hearing financial gurus touting investments, talking about portfolio diversification and getting profits from investing in the stock market can make you think that you are missing out on doing the right thing if you are not invested. After all, investing in the stock market made so many people rich, right?
Well, the true answer is “it depends”. While you certainly can make money in the stock market, you can also lose money. YES, you can lose a lot of money in the stock market, especially if you are not experienced and not careful! I am not saying this to discourage you or to instill fear in you but rather to caution you so that you take the right steps with your money management BEFORE you start investing.
The key to Financial Freedom is Effective Money Management.
Investment strategies are simply components of Effective Money Management (EMM). EMM starts with CLARITY about your financial goals, current income, spending habits and priorities so that you feel empowered to make savvy financial decisions. I believe that before you decide to make any investments, you must develop the discipline of effective money management. I suggest that you set up bank accounts that will help you maintain this money-savvy attitude easily.
Create a system of linked bank accounts that will allow you to automate your money management and track your in-coming and out-coming flow of money with ease and confidence. Transparency of your financial transactions will help you grow awareness about your money habits and improve on them.
Here are a few suggestions for systematizing your bank accounts:
Purpose: Have a clear picture of your incoming money.
Purpose: Keep track of your monthly spending, evaluate what can be adjusted, keep yourself accountable for your spending choices.
Purpose: Develop financial discipline and build a safety buffer to remove financial anxiety.
Purpose: Once you accumulate a significant amount of money in Financial Freedom account, you can start investing strategically to build your way to Financial Freedom in your life.
While this automated linked banks accounts system may, at the beginning, require you to stretch your way of thinking about managing your money, it will certainly allow you develop discipline around money management. If you truly commit to becoming financially free, I believe the suggested structure will ultimately help you remove the financial stress that often comes from ineffective money management and put you well on your way to Financial Freedom.
Do these suggestions make sense to you? How do YOU manage your money?
Remember: It is NEVER too late to become FREE!
Millen is a Wealth architect and Financial Independence Coach, entrepreneur, and a bestselling author. Being a Possibilities’ Catalyst, she uses her intuition, business, and investment expertise to support entrepreneurial women (like you) who want to master their money, live their purpose achieve financial prosperity and freedom. With her physics and business education, corporate and entrepreneurial experience, money management know-how, mindfulness practices and transformational coaching skills, Millen has a unique ability to guide and support clients in achieving extraordinary success in their lives.
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