The Importance of Your Financial Comfort Zone
At what point do you relax about money? At what point is it not a key factor in most of your daily life? Are you more comfortable with money in the bank or with income you know is coming in? And, how much money in the bank or how much income?
Or how about these questions: Are you more comfortable spending items of a smaller value such as $20 x 5 items, or one item at $100? Do you carry cash? If so, how much do you like to have in your wallet? Do you withdraw what you need, or do you have a regular comfortable amount of money you withdraw each time?
Do you spend as much time thinking of ways to generate income as you do thinking of ways to spend it? Do you know how much you really spend each month? In total; on certain items? Does a certain amount of income register in your mind as being worthy of your time and consideration? If so, what is it? Is there a point when the income potential just doesn’t seem significant?
There are many questions you can ask on this topic but do they really matter? The answer is absolutely. Because becoming aware of your biases, values, comfort levels will help you plan for today and for the future. Perhaps you haven’t stopped to consider the impact of these issues.
I will tell you that for myself, it took me a long time before I realized having money in the bank (or somewhere invested) didn’t really mean as much as knowing there was income coming in on a regular basis. The significance of this knowledge to my life today is that I am much more relaxed about financial matters when there is regular income as opposed to larger sums less frequently. With this knowledge I can plan our income structure accordingly. If you worked in sales, and had a comfort level like this, you would be more relaxed selling more items with a smaller commission than larger items with a bigger pay cheque.
For future planning, many people want to know how much money they will have available to them when they leave work. If the person asking had a profile similar to mine (which is the most common profile, by the way), then even if they achieved their target accumulation figure, they would be extremely uncomfortable just with the cash available unless there was a guaranteed income from that money. People with this profile will also be more stressed watching the value of their savings drop as they withdrew funds for income needs.
These questions are part of exercises and a financial personality assessment in the MoneyMinding® Method ecourse that are designed to help identify your individual financial style. With this knowledge you can establish systems and strategies to work for your own unique personality.
Whether you like it or not, it’s invaluable to know these things about yourself so you can make decisions that support you where you are. When you are aware of your real needs and why these are important to you, you can make decisions and plans that will support you in a way that keeps you in control in a non-stressful, simple way. All your planning for today and for the future depends on it.
copyright 2006 Tracy Piercy, CFP
Written permission is required for reproduction. Thank you.
Or how about these questions: Are you more comfortable spending items of a smaller value such as $20 x 5 items, or one item at $100? Do you carry cash? If so, how much do you like to have in your wallet? Do you withdraw what you need, or do you have a regular comfortable amount of money you withdraw each time?
Do you spend as much time thinking of ways to generate income as you do thinking of ways to spend it? Do you know how much you really spend each month? In total; on certain items? Does a certain amount of income register in your mind as being worthy of your time and consideration? If so, what is it? Is there a point when the income potential just doesn’t seem significant?
There are many questions you can ask on this topic but do they really matter? The answer is absolutely. Because becoming aware of your biases, values, comfort levels will help you plan for today and for the future. Perhaps you haven’t stopped to consider the impact of these issues.
I will tell you that for myself, it took me a long time before I realized having money in the bank (or somewhere invested) didn’t really mean as much as knowing there was income coming in on a regular basis. The significance of this knowledge to my life today is that I am much more relaxed about financial matters when there is regular income as opposed to larger sums less frequently. With this knowledge I can plan our income structure accordingly. If you worked in sales, and had a comfort level like this, you would be more relaxed selling more items with a smaller commission than larger items with a bigger pay cheque.
For future planning, many people want to know how much money they will have available to them when they leave work. If the person asking had a profile similar to mine (which is the most common profile, by the way), then even if they achieved their target accumulation figure, they would be extremely uncomfortable just with the cash available unless there was a guaranteed income from that money. People with this profile will also be more stressed watching the value of their savings drop as they withdrew funds for income needs.
These questions are part of exercises and a financial personality assessment in the MoneyMinding® Method ecourse that are designed to help identify your individual financial style. With this knowledge you can establish systems and strategies to work for your own unique personality.
Whether you like it or not, it’s invaluable to know these things about yourself so you can make decisions that support you where you are. When you are aware of your real needs and why these are important to you, you can make decisions and plans that will support you in a way that keeps you in control in a non-stressful, simple way. All your planning for today and for the future depends on it.
copyright 2006 Tracy Piercy, CFP
Written permission is required for reproduction. Thank you.
posted by Tracy Piercy at 9:33 PM
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