Are you bothered by inertia? Inertia is what makes spinning a raw egg on its top or bottom impossible. Why? The yoke is not attached to the shell and creates a drag on the spin. Inertia can be the yoke that prevents change in your life. Inertia is what causes hesitation to correct a bad habit. Or inertia may cause delay in the application of new ideas. In business and personal finance it can delay the changes necessary to adjust life goals or to take advantage of a new financial position. Obviously, committing to make changes in life can be much easier than actually accomplishing the changes. The year is swiftly passing, what do you want to change about your financial position, before year-end?
Angela Coleman, a Kentucky- based fiduciary investment advisor at Unified Trust Company suggests some helpful information to assist changes in our financial life.
1. “Starting is more important than what you start with.”
Often we become complacent with the status quo. If everything is running smoothly, why upset the “apple cart”? Overcoming inertia begins by saving even small amounts of money or making strategic investments that will pay dividends in the future. The stock market is experiencing super growth. Jump in, even if you invest a small amount of money.
2. Make goal-based financial plans. Decide what you want to accomplish and set reasonable goals. Maybe you want to start a business. Do it! It will not happen if you hesitate. “Put your hands on the plow and do not look back.”
3. Make a budget and follow it faithfully. Consider what you want to accomplish. Write your goals and post them where you will see them each day (post them on your bathroom mirror). Every day, look at that list and say, “This is my financial image. How will I improve it?” Follow your plan and watch the growth occur. But you must start, even if your start is very slow and methodical.
4. Carefully follow your plan. Stop making impulse purchases or simply wasting money.
If you are guilty of impulse, knee-jerk decisions, think of your plan. If you want to purchase something, think about what you must give up as a result of spending funds that have been allocated to other matters. As you progress, give yourself a present; but only using the “growth funds” not the investment corpus.
5. Open a savings account where you can stuff cash for emergencies. “Quick on the draw” should never refer to pulling out your credit card. Use credit sparingly; remember that credit purchases now must be paid with future funds you have committed to other matters.
Credit cards postpone payment at a cost. If you allow the balance on the card to go unpaid, interest will be charged. That is counter productive to your new strategy.
6. Delayed gratification can be a reward for following your plan. It is not a bad thing to reward yourself for making and keeping your new strategic plan, but be reasonable.
Keeping up with the “Joneses” or trying to impress others with your possessions is not real gratification. That is called “pride” and “pride goes before destruction.” Bridle the “impulse horse” and ride to a new financial security.
For more information, call Wilson & Wilson, PC, CPA, CFE at 615-673-1330 or email jim@ wilsonandwilsoncpa.com