How To Stay Encouraged On Your Financial Journey

  

The Importance Of Regular Encouragement In Personal Finance

So today I'm going to try and convince you just how important it is to have a community/system/coach in place to help you stay encouraged along your personal finance journey.

I'm going to argue that encouragement is pivotal because:

1. It acts as guardrails around the new behaviors you're trying to develop.

2. It will serve as "behavior insurance" against the enemy in the mirror and the "marketing industrial complex" that will always encourage you toward the (horribly misguided) cultural norms.

3. The right kind of encouragement is actually the best accountability you could ask for because it will be your constant companion and your ever gentle reminder to keep you on track.

We're also going to talk about the internal and external versions of accountability (i.e. your conscience and your community) and how important it is to have those elements in place.

So, the goal for today is for you to be convinced that 1) you need regular encouragement (easy enough) and 2) how you can make sure that you have systems in place that ensure your success in the encouragement bracket.

Let's jump in!

 

It almost goes without saying that personal finance is deeply personal. This is why it's important to make sure whichever "principle" and "tips and tricks" you're attempting to internalize are applicable to your own personal situation at this particular time and place in your life. This can be perplexing and even a little difficult to discern depending on what it is you're trying to improve.

 

To illustrate just how personal - personal finance is, let's explore the differences between budgeting and investment strategy. For the purposes of proving out this principle of "personal finance being personal", I'm going to argue that everyone needs to be on a budget regardless of their financial situation but not everyone should be investing, at least for the short term. Let's unpack.

 

Be sure to download the free "quick start guide" that goes along with this series.

 

Budgeting in principle, is pretty simple. It's essentially an organization of your cash flows, tracking what comes in and assigning a job to each one of those units of value. There are lots of different methodologies, too: the "zero based" budget, the "50/30/20" budget, the "paycheck" budget.

 

Still, while there are different ways to budget, the concept is pretty simple and which method you choose ultimately winds up being a process of trial and error. But the point is, everyone should be on a budget, no matter what income level, financial/debt situation, investment acumen, etc.

 

Now let's contrast that with investment strategy. Investment strategy, even in principle is much more complex and convoluted that the idea and practice and budgeting. In fact, I would say that budgeting is an absolute precursor to investment strategy because the habit of budgeting is ultimately going be the vehicle that helps you free up the funds in the first place.

 

So, while absolutely everybody and their grandma should be budgeting, not everyone should be investing, especially if they have high levels of debt. Let me explain in a little more detail before you dismiss me as a heretic. :)

 

So you see, investment strategy is contingent on several different factors: debt level, income level, stage of life, risk aversion profile and overall personality time to name just a few. As a matter of principle, when we engage with new students that have any kind of consumer (non-mortgage) debt (i.e. credit cards, student loans, car loans, personal loans, etc), we automatically recommend that they stop all investing temporarily. In fact it's "Step 0" in our 8 Steps To Erase Debt system:

 

The 8 Steps To Erase Debt

0. Stop All Retirement Investing (Until Step 4)

1. Build A Budget

2. Starter Emergency Fund of $1000

3. Eliminate Debts Smallest To Largest (a.k.a The Debt Snowball)

4. Full Emergency Fund of 3-6+ Months' Expenses

5. Invest A Minimum of 15% Income Into Retirement Accounts (and increase savings rate to 50%+ if possible)

6. Education Funding (if applicable)

7. Pay Off The Home Mortgage

8. Build Wealth, Serve and Be Ridiculously Generous 

 

Why do we recommend this? Because in personal finance (which again, is deeply personal), you can only really focus (with the required intensity) on one thing at a time, in order to get traction and systematically accomplish your goals. And every single time we've run the numbers and done an analysis with a new student as to the interest they're paying on their debt vis a vis the interest they're earning on their investments its: 1) at best "a wash" meaning they're cancelling each other out or 2) at worst (and more commonly) they're being eaten alive by the interest they're paying on their debt.

 

So, trying to invest while in a deeply indebted posture is watering down both: 1) your investment strategy and 2) your ability to tackle and eliminate your debt with the required focused intensity. So, for the vast majority of folks, investing while they're in debt is akin to running on an invisible hamster wheel. No wonder discouragement causes so many people to just give up, eh?

 

So, I use that point to illustrate that personal finance is deeply personal and you often need that external set of eyes on your situation to help you 1) identify the holes in your lifeboat and 2) encourage you to take some steps to plug the holes and to more importantly start building a new and better boat.

 

It almost goes without saying that addressing anything having to do with personal finance can be overwhelming, frustrating and ultimately discouraging. A combination of any of those three can derail your efforts almost in an instant.

 

So it almost equally goes without saying that, if you're going to address your finances, tackle your debt, get on a budget or any delve into any new skill or endeavor in the personal finance realm, it's going to be super important that you have a support source/network in place to help you navigate it both functionally as well as emotionally.

 

Why do you need make sure you have support? Three reasons: 1) for guardrails and expertise about the particular skill you're learning (i.e. budgeting or investing) and 2) to help guard against falling back into old thought and habit patterns and 3) to help you guard against the inevitable resistance you'll run into from the world in the form of a) peer pressure to spend money and b) the possible disapproval of friends, family and social network as to your pursuit of a more frugal, financially solvent lifestyle.

 

When you're learning any new skill, it always makes sense to have a mentor, teacher or coach at hand when you get stuck and have questions that need answers. Budgeting is alway a huge issue for many of our students in this regard and the quasi-mastery of it takes about 90 days, which is almost an eternity in this "quick-fix" digital age.

 

With budgeting in particular, there will always arise instances when something doesn't quite add up OR there are questions about how to apply a certain practice or principle to your particular circumstance.

 

In any kind of "personal financial improvement" posture, you're going to have to face the enemy in the mirror that keeps pulling you toward the very thought and behavior patterns you're actively trying to jettison. 

 

The enemy in the mirror coupled with what I call the "marketing industrial complex" is always going to try to pull you toward the bleak statistic that 78% of people live paycheck to paycheck (CareerBuilder 2017) and 40% of Americans would struggle to cover a $400 emergency (Bloomberg, 2019). And, if you need a little more proof, just look at the average consumer debt numbers from 2019 (which I'm sure are far higher now).

Average Consumer Debt (According to NerdWallet, Inc, 2019):

• $195,967 Mortgages

• $46,954 Student Loans

• $27,978 Auto Loans

• $6,591 Credit Card Debt

• $138,722 Any Type Of Debt

 

So again, to help guard against falling back into old thought and habit patterns and to help you guard against the inevitable resistance you'll run into from the world in the form of

 

a) Peer pressure to spend money you don't have

b) The possible disapproval of friends, family and social network as to your pursuit of a more frugal, financially solvent lifestyle

 

You want to make sure you have a solid system to follow (i.e. The "8 Steps") and a solid community/coach to help keep you encouraged toward your goals.

 

For the longest time the terms accountability and encouragement for me mixed a little bit like oil and water. They just didn't go together in my mind at all.

 

In fact, until I got some financial coaching myself, I viewed the term "accountability" much like I did my army basic training drill sargeant: always looking for fault and eager to scream it into my ear at the earliest evidence of it. It's no wonder it took me many years to sort of reinterpret that word (i.e. accountability) into its more positive connotation as the more gentle direction of wise council, subtle correction and the impartation of life experience, all aimed at shortening my learning curve and getting me to my goals in a fraction of the time.

 

You see, when you have the proper type and amount of accountability in built into your learning cadence, it can actually be very encouraging. Having a community and or a personal coach can be a constant, gentle reminder that you're on the right track and that you have a team in place that has your best interest in mind, especially when life throws the errant discouragement pie in our face.

 

The right kind of accountability keeps you on track and is a constant companion and reminder that "you're on your way". Let's talk about what accountability might look like. Additionally, there are two types of accountability that I think are important to articulate here, internal and external accountability and they both work together really well.

 

Internal Accountability - The Conscience

• Have you ever been able write a budget and actively stick to it? “Actively” here means rewriting/updating at least monthly.
• Have you ever been able to keep track of your expenses consistently?
• Have you ever been able to regularly say “I can’t afford it” when presented with social pressure to spend money you know you don’t have?
• Do you have problems keeping track of money you spend with your credit or debit cards?

Answering these questions honestly and deciding to engage a community/coach is pivotal if you want to make real progress in this process. I know it may be painful and awkward, but if you REALLY want results, you've gotta have it.

 

And so we've come to the importance of externalizing your sources of encouragement. This is so important and something I still struggle with, particularly when it comes to my own fitness goals for example.

 

Almost every year I say to myself, "man, I really need to sign up for a 5k or a 10k". Inherently, I know that this is a sort of "forced" external accountability because, at some point in the future, I'm going to have to "give an account" (i.e. run with a bunch of other folks that will demonstrate or disprove my adherence to my own fitness regimen).

 

How much more so with personal finance? We set goals, new year's resolutions, make promises to ourselves at 1am (while downloading some free personal finance guides from the interwebs:)) that we're going to "get it together". We white knuckle through a crappy first draft of a budget, get discouraged in "week two" and abandon altogether.

 

Sound familiar? You're not alone my friend, not by a long shot.

 

That's why you've GOT to get into community. And when I say "get into" I don't mean just "join and hope for the best". I mean engage, share, encourage others. This would be in opposition to the normal tendency to join groups and just "lurk" in the shadows, consuming everyone else's questions, comments struggles and never diving in to be vulnerable and share your own.

 

To help you with this, I have two resources, one free and one paid (and I only open it a couple times a year).

 

This is a free private community over on Facebook where you're encouraged to join, share and . I'll be honest, there's not a ton of engagement there. It really serves as a channel for me to push out content like this, to ask questions and survey our members to find out what they need, but I've found it exceedingly difficult to get people to engage.

 

Why? I honestly think it's a combination of factors: 1) it's Facebook and I think a lot of folks are increasingly reticent to share any kind of personal details on that platform and 2) it's free so there's no "skin in the game". There's no real reason to "lean in", to share, to encourage, to be vulnerable. In fact, many of our members are in several FB financial coaching groups and I would assume they don't engage there either.

 

All that said, there are moments where people do engage and I'm usually the first to 1) encourage and 2) offer perspective and/or tools to help them with their situation.

 

Where you're really going to see a ton of engagement and therefore progress is in the context of my private coaching community. This is a very low-cost means of 1) plugging into a highly motivated, highly encouraging and compassionate community and 2) turbo charging your progress toward your financial goals.

 

The ZeroDebt+ Private Coaching Community offers you 3 primary elements:

●  Access to live monthly group coaching calls with me.

●  Fresh monthly masterclasses designed to help you continue to master your money.

●  And a private online community of like minded personal finance students all designed help you break through your plateau and move you ever closer to your financial goals - all without having to do it alone.

Like I mentioned above, I only do a limited enrollment a couple of times a year, so if it happens to be closed, go ahead and sign up for the waiting list and that will ensure you're notified when I do open it.

Here are some real results our students are getting:

Trey has paid off well over $10k and is in the process of supercharging his results for 2021! Way to go, Trey!

Marcus increased his savings rate to 20%(!), buttressed his emergency fund and paid off $1700 of debt! Keep up the great work and so excited for you, Marcus!

Kyle paid off $6000 in debt, also buttressed his emergency fund, was able to make some repairs... Well done and super excited for you, Kyle!

And Susan is continuing to push forward toward total debt freedom! Susan, you've overcome so much and I'm so proud of your progress!

These are amazing wins, right?! I'm so proud of all of our students and can't wait to have you in our amazing community! 

 

Conclusion & Call To Action

Okay, so hopefully by now I've convinced you just how important it is to have a community/system/coach in place to help you stay encouraged along your personal finance journey.

Encouragement is pivotal because:

1. It acts as guardrails around the new behaviors you're trying to develop.

2. It will serve as "behavior insurance" against the enemy in the mirror and the "marketing industrial complex" that will always encourage you toward the (horribly misguided) cultural norms.

3. The right kind of encouragement is actually the best accountability you could ask for because it will be your constant companion and your ever gentle reminder to keep you on track.

We've also talked about the internal and external versions of accountability (i.e. your conscience and your community) and how important it is to have those elements in place.

 

Call to Action

I never want to do a "data dump" of new information with great prompts without giving a very logical next step that will absolutely concretize what you've just learned. My "call to action" today is for you to actually do something with the new information you have. So, to help you externalize and systematize your financial goals, join at least one of these two:

1. My "ZeroDebt Tribe" Private Facebook Community: this is open at all times and free to join.

2. My ZeroDebt+ Private Financial Coaching Community:   I only open this a couple of times a year, so if it happens to be closed at the moment, go ahead and get on the waiting list. I promise it will be worth it!

Okay, now that we've gotten you in a posture to get some great results, let's talk about a (free) solid and proven system to help you master your money once and for all.

 

And whether this is your first or thousandth time on the blog, I want to make sure you have this “8 Steps” framework that ALL of our content is centered around. 

 

These are the steps I personally followed to obliterate $43,000+ of debt in 2.5 years. 

 

Maybe your number is bigger, maybe it’s smaller. Either way the principles are the same and I want you to have them.

 

 

I’ve created a simple, easy to follow guide that you can use as your foundation as you navigate the absolute annihilation of your debt forever.

  

And again, if you’re looking for some resources to get started, you can download our free budgeting printables. Also, if you’re in a place where you’re ready to kick your debt in the teeth, here's the link to our free “8 Steps To Erase Debt” guide for you to use as your foundation.

 

To your freedom,

 

Brad