There are a few secrets in personal finance and here is one: you gotta know what you want.
Easy? Not so fast. Zoning in on what you want out of life is a big task. And, zoning in on what you want from your financial life isn’t always a picnic, either. Coming up with goals and plans can seem intimidating. They can also be emotionally-charged. No wonder so many people just give up and hope for the best!
“Hoping for the best” is never a strong position. So how do you take active responsibility and figure out what you want to achieve with your money? And, by extension, what does this say about your life?
First, take a Financial Inventory. It is very easy to tabulate where you are and that is the first step to figuring out where you’d like to go. The hardest part of the financial inventory is looking at this assessment in the eyes. Face it: you can’t improve your financial life without being honest with yourself.
Now that you have a firm grasp on where you stand the next step is to consider your highest values. If you had the privilege to have the kind of cash available to Bill Gates or Oprah—how would you use it to make the world a better place? For example, Gates uses his vast fortune to fund to fighting disease. Oprah uses her fortune to provide educational opportunities. What about you? Would you like to establish a scholarship? Create a lasting financial gift for your family? Donate to humanitarian or environmental causes?
Once you can name the handful of ways you’d like to share your money you can step back and figure out a plan to make that a reality. For example, your highest goal might be to serve those who cannot speak for themselves or defend themselves—impoverished children, abused or neglected animals, or the environment. Or maybe the goal is more modest and closer to home. No matter: the important thing is that you determine how your finances can positively affect the world around you.
Note: It is okay to be selfish here, too. Maybe your motivating factor is to buy that new shiny car. You can still work for goals like these. It is just more satisfying to work toward goals that do not expire when you purchase something.
It is my personal opinion that very wealthy people of today and of yesteryear gave considerable thought to how their money could be used for the higher good. It wasn’t because they had oodles of cash to dispose. I believe it was because they recognized the unique opportunity they had to affect positive change. Compared to many in the world we Americans enjoy extreme privilege. Even the poorest among us have access to clean water and library books, for example. (Libraries: those are thanks to Carnegie’s golden goal!)
Okay, now it’s time to put your desires into action. Here’s how.
- Choose what you can regularly afford to invest in your grand goal to make it a reality. Commit to making it happen.
- Invest it in a vehicle that meets your needs and supports your beliefs
- Remember that small steps and small amounts add up over time.