How to get off the financial treadmill

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Do you often feel like you’re on a treadmill when it comes to getting paid each week/month and having to meet all of the routine family expenses, loan repayments, bills, etc.? Like you’re running on the spot, and going nowhere? In our Mackay and Bowen Basin region, this is often amplified, because there are often very healthy incomes that make us feel like we should be getting ahead!

I have this conversation very often with those who are serious about getting off the financial treadmill. It usually starts with “We have so much going on… we don’t know where to start” or “We have a fairly basic lifestyle but still struggle to make ends meet.”

In the grand scheme of things, it’s difficult to make changes unless you have perspective on the big picture, and become inspired by ‘what is important to you and your family in life’ and can document the goals/milestones that support this becoming a reality.

For the sake of this article, let’s assume that you have all of the motivation needed to make a change and you have clarity on the outcome you wish to achieve. The secret is then to be able to measure where you are today and use data to track your progress. If you cannot measure the effect of a given set of actions, it is difficult to know if;

a) should you be doing more or less of those actions, or;
b) should you be doing them at all.

For example, if you want to shed some kilos or improve your body balance, you would use a scale (or if you are lucky a body composition scanner) to measure your progress from the starting point, so that you can know where you are at any given point and manage the weight-loss/muscle gain strategy accordingly.

The same applies to managing your finances and your cash flow. If you think you are spending too much on eating out, buying gifts, coffee, etc., then take the time to examine these expenses and work out exactly what you do spend and where. Is this the area of concern that you thought? Then you would need to set some targets of where you believe the spend per week or month should be and track it with discipline (no more than monthly intervals).

You will find that your behaviour changes in the area of focus just because you are looking at it and tracking it. It’s easier to walk past the coffee shop if you know this is an area you are working on, and the coffees you do have are all the more satisfying!

Today’s beauty of our world of devices and apps is that this job of tracking expenses has become so accessible. Most of our banks have expense tracker apps and/or downloadable transaction data, so the old excuse for this very manual and time-consuming process is no longer a real excuse.

The Cashflow Treadmill

Taking this to the next level, where you have successfully stepped off the cashflow treadmill and now find yourself on the investment (or paying down investment-related debt) treadmill or not even sure where to start directing your savings, the same principle applies. Gain clarity on where you are today and have a documented plan built around the things most important to you and your family, as well as your priorities. Implement a way of measuring your progress against the plan (at least annually) so that you can proactively manage your family’s financial plans. That is what we call ‘making smart financial choices’ Each financial choice you make should only increase the level of certainty that you will achieve the things that matter most to you in life!

Getting off your financial treadmill is something that is definitely in your control! Maybe you need to be inspired about what’s possible in your future to get past the fear of change (or damage in pride) and even to contemplate change. Remember, ‘Energy flows where attention goes’. Step off your treadmill, step out of your comfort zone, and create a doable and inspiring plan to which you (and your partner) can commit. Tracking is the fun part, where you can see your progress.

Who needs treadmills in our perfect Mackay/North Queensland weather anyway?!

Paul Shepherd | CFP® Professional, BEng, DipMgt, Accredited Investment Fiduciary® is a representative of Alman Partners Pty Ltd, Australian Financial Services Licence No: 222107.

Note: This material is provided for information only. No account has been taken of the objectives, financial situation or needs of any particular person or entity. Accordingly, to the extent that this material may constitute general financial product advice, investors should, before acting on the advice, consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation and needs. This is not an offer or recommendation to buy or sell securities or other financial products, nor a solicitation for deposits or other business, whether directly or indirectly.