2659: [Part 1] The Stages Of Financial Management by Andrea Joy of Saving Joyfully on Consistent Planning

[00:00:00] Dreaming of a better sleep, tossing in turning is not your destiny and Ali is here to help.

[00:00:08] Ali invites you to sink into sweet, sweet slumber to improve your mental and physical

[00:00:13] health and overall wellness.

[00:00:15] More than just melatonin, Ali's ingredients help you in wise your mind for a delightfully

[00:00:20] dreamy drift off.

[00:00:22] Sleep is on the way at Ali.com That's ollly.com

[00:00:30] Hi, Bob Gaspeable.

[00:00:31] I'm Vanessa and I just use myself directed IRA to invest in renewable energy.

[00:00:35] All rise for Vanessa alternative investment royalty.

[00:00:39] I dabbled in crypto but wanted something less volatile for my retirement.

[00:00:43] Bye bye blockchain.

[00:00:44] Like being an investor in solar technology.

[00:00:47] Make it rain, Vanessa.

[00:00:49] I mean, it's solar, but yeah, I get the metaphor.

[00:00:52] Can your IRA invest in alternative assets?

[00:00:54] A new direction trust company.

[00:00:56] The answer is yes.

[00:00:57] Start today at ndtco.com

[00:01:00] This is Optimal Finance Daily Episode 2659.

[00:01:04] The stages of financial management Part 1 by Andrea Joy of SavingJoyfully.com

[00:01:11] and I'm your host and personal finance enthusiast Diania Merriam.

[00:01:15] This is the show where I serenade you with the sweet sounds of personal finance knowledge

[00:01:20] from some of the best blogs on the planet with the author's permission, of course.

[00:01:25] Now today I have a bit of a longer post, so I'll read the first half today and then

[00:01:29] we'll finish the rest for you tomorrow.

[00:01:32] So with that, let's dive into the first half and start optimizing your life.

[00:01:40] The stages of financial management Part 1 by Andrea Joy of SavingJoyfully.com

[00:01:48] Have you ever thought about the process of understanding personal financial management?

[00:01:53] We all know that financial management is not something we're just born knowing.

[00:01:58] Personal financial management is a process that must be learned and understood, so how

[00:02:03] do people learn to manage their finances properly?

[00:02:07] In learning to manage our finances I believe we learn in stages which we progress through

[00:02:12] much like the human growth process.

[00:02:15] The stages of financial management.

[00:02:18] Spending some time with my toddler daughter recently had me thinking about this process.

[00:02:23] I've watched my toddler daughter as she learns and reacts to everything.

[00:02:28] It's cool to see how she learns and grows in so many areas, her speech as she learned

[00:02:33] to talk, recognizing cues, and growing physically and emotionally.

[00:02:38] While watching her responses and the way she's progressing, I've begun to realize that

[00:02:42] the same can relate to the stages of financial management.

[00:02:46] We do not begin to understand personal financial management overnight.

[00:02:50] Many of you have probably learned to understand your finances over years of experiences

[00:02:55] and insight gained through those experiences.

[00:02:58] Just like a child grows into adulthood through experiences, and with an educational along

[00:03:03] the way, we have learned the right way to handle our money.

[00:03:07] While learning to manage our finances, we go through stages in our development just like

[00:03:11] children do.

[00:03:13] Financial management is not, however, something that we naturally understand.

[00:03:17] It requires an understanding of our finances and an education on how to properly handle

[00:03:22] them.

[00:03:23] Sometimes, this education is provided through traditional education, but often it comes

[00:03:28] after difficult lessons learned while mismanaging our finances.

[00:03:33] Stages of financial management.

[00:03:36] Stages of development and financial management are similar to our stages of development as

[00:03:40] we grow.

[00:03:42] Most are learned through maturity and better decision making.

[00:03:45] This does not happen naturally.

[00:03:47] It happens as we gain education, experience and good decision making skills.

[00:03:52] How to recognize the stages of financial management.

[00:03:56] The baby stage.

[00:03:58] 100% dependent on others and no responsibility.

[00:04:01] No understanding of money or financial management.

[00:04:05] The child stage.

[00:04:07] In the child stage, you know that money exists.

[00:04:10] You don't manage your own money because you have none that you earn.

[00:04:14] The teenager stage.

[00:04:16] Trying to be independent and self-sufficient and making mistakes but hopefully not big

[00:04:20] ones.

[00:04:21] Ideally learning lessons through your financial mistakes help you progress to the next stage.

[00:04:27] The adulting stage.

[00:04:29] Beginning to make the right decisions, completely independent, beginning to properly manage

[00:04:34] debt and income.

[00:04:36] The mature stage.

[00:04:38] Working your plan consistently.

[00:04:40] You have a budget, you have savings, no debt or manageable debt.

[00:04:45] Good credit, prioritizing investing, savings and good financial choices.

[00:04:50] My journey through the stages of financial management.

[00:04:54] I found myself stuck between teenager and adulting for many years.

[00:04:59] I was 23 years old and buried in debt before I even knew how to properly manage my finances.

[00:05:05] At that time, I was a college student with student loans.

[00:05:09] I was all maxed out credit cards and poor money management skills.

[00:05:13] Then one day, I met my husband as I was in the midst of this financial mess that I had

[00:05:17] created for myself.

[00:05:19] I was working multiple jobs just to pay my bills, attending college in hopes of a better

[00:05:24] paying career someday and just feeling overwhelmed.

[00:05:28] No matter how hard I worked and how much more money I made, I never seemed to be that

[00:05:33] much better off.

[00:05:35] One evening, I confessed to my husband who was my boyfriend at the time how much debt

[00:05:39] I had.

[00:05:40] Instead of running away and judging me for my poor decisions, he kindly explained to me that

[00:05:44] my budget was the issue and not so much a lack of income.

[00:05:49] Growing up, I never heard positive things about money and had not learned how to properly

[00:05:53] manage my own money.

[00:05:55] I hadn't been taught the value of saving, how to pay bills, balance my checking account

[00:06:00] or create a budget.

[00:06:02] I witnessed many arguments between my parents regarding my parents' overspending and the

[00:06:07] financial stress my dad was feeling as he tried to manage their budget.

[00:06:12] I didn't understand the correct response to struggling to pay my bills and was handling

[00:06:17] my situation the very best way I knew how.

[00:06:20] After that conversation with Jason, I still struggled but I finally recognized the problem

[00:06:25] was not just the money I was not making.

[00:06:28] The real problem was my lack of understanding of managing the money that I was making.

[00:06:34] Sacrifice versus making the right financial choices.

[00:06:39] After my conversation with Jason, my husband, I began to understand the actual process

[00:06:44] of financial management much better.

[00:06:46] I realized that there was a process that I needed to follow to finally decrease my debt

[00:06:51] and improve my future.

[00:06:53] I would like to tell you that at this time I progressed to the next stage immediately.

[00:06:57] Sadly, I did not progress that quickly.

[00:07:00] I began to learn and understand but I still resisted some of what I knew needed to happen.

[00:07:07] To Be Continued

[00:07:13] You just listen to part 1 of the post titled The Stages of Financial Management by Andrea

[00:07:19] Joy of SavingJoyfully.com

[00:07:21] And I'll be right back with my commentary.

[00:07:24] It's no secret that something always comes up when you're running a small business.

[00:07:28] It's time to take the pain out of payroll benefits and HR and put the joy back in running

[00:07:33] your business with Gusto.

[00:07:36] Gusto's payroll and HR services can make it a little easier.

[00:07:40] Gusto was designed for you, the small business owner.

[00:07:43] They take the pain out of running a business.

[00:07:46] The calculating paychecks, filing payroll taxes, setting up open enrollment, Gusto does

[00:07:51] it all.

[00:07:52] Want more?

[00:07:53] Time tracking, health insurance, 401k, onboarding, commuter benefits, offer letters, access

[00:07:59] to HR experts, you get the idea.

[00:08:03] With Gusto you can focus on the joy of running your business.

[00:08:06] It's super easy to set up and get started.

[00:08:08] And if you're moving from another provider, Gusto can transfer all your data for you.

[00:08:13] It's no surprise 94% of customers are likely to recommend Gusto.

[00:08:18] 94.

[00:08:19] Here's the best part, because you're a listener, you get three months totally free.

[00:08:24] All you have to do is go to gusto.com slash OFT.

[00:08:27] Again that's gusto.com slash OFT.

[00:08:30] I'm telling you, you're going to love Gusto.

[00:08:33] Get started today.

[00:08:36] Shipping can make or break a sale, so optimize how you ship your orders with ship station.

[00:08:41] They make it easy to automate and manage orders no matter how big your business grows.

[00:08:46] And they might even be able to help reduce shipping and warehouse costs, so optimize

[00:08:51] and keep up your momentum for growth with ship station.

[00:08:54] Sign up for your free 60 day trial now at shipstation.com and use the code POD.

[00:08:59] That's shipstation.com with the code POD.

[00:09:03] I enjoyed the focus here on the management of money because when I was first wrapping

[00:09:08] my head around my finances, I had no idea that my real problem was money management.

[00:09:15] For a long time, I thought I had an income problem and if I just made more money, I could

[00:09:20] easily pay off that and start saving and investing.

[00:09:24] And while this may have an element of truth for some people, meaning it is totally possible

[00:09:28] that you have an income problem, this was not the case for me.

[00:09:33] Once I started questioning my belief about my income being the problem and took a hard

[00:09:38] look at my spending, things really started to shift.

[00:09:42] I started to see the gap between my income and expenses as much more important than my

[00:09:47] income and took steps to increase and then protect that gap.

[00:09:52] That was really a paradigm shift for me.

[00:09:55] I had to recognize that if I couldn't manage $1,000, then I also couldn't manage $1,000,

[00:10:01] and I wasn't going to suddenly learn how to handle money by having more of it.

[00:10:06] This is why 70% of people who win the lottery or receive a large windfall of money go bankrupt

[00:10:12] within a few years according to the National Endowment for Financial Education.

[00:10:17] Another way to put it would be that financial literacy is not a side effect of wealth.

[00:10:23] Rather wealth is a side effect of financial literacy.

[00:10:26] Well, that should do it for today.

[00:10:28] Have a happy rest of your day and a great weekend and I'll see you on the Monday show

[00:10:33] tomorrow where we'll finish up this post and wear optimal life awaits.