We all want confidence. How do we get it? Pt 1
I know a few facts about golf:
It involves a short and long game.
The best golfers are generally proficient in both.
Different clubs and strategies are required for both parts of the game.
I also presume the difference between the two centers around:
Distance
Accuracy & control
Outside elements
We can grow and advance in all areas of our personal finances.
In March 2024, New York Life conducted a wealth survey that yielded very interesting results. Generally, more than 75% of women reported confidence in handling the day-to-day financial responsibilities. Those responsibilities included paying bills, maintaining good credit and saving for emergencies. Conversely, 49% or less of the participants felt knowledgeable about long term goals. Building wealth, investments and planning for future generations were universal trouble spots for women. That is close to a 30% difference!! Significant to say the least.
Two questions sprang to mind: 1) What caused the drop in confidence, and 2) how can we grow more confident in that piece of our financial lives? Digging into the differences between the short and long game can provide some insight.
Distance
Short term – Balancing a monthly budget or saving 3 months of expenses in an emergency fund have relatively short timelines and reside within in the control of the household financial manager. We understand our monthly income and expenses, easily evaluate what to do with any leftover, and interact regularly with credit products. Confidence grew by regular practice and seeing immediate successes.
Long term – Building wealth or planning for future generations have a more nebulous end goal and a perceived higher number. The higher number seems too large relative to current income and pinpointing what you will leave to future generation is challenging to project. Confidence decreases due to lack of information and uncertainty of future resources.
Strategy to consider – Break the long-term goal into smaller, intermediate goals. Track progress by 5 years versus 35 years. During those smaller intervals, your income changes. Intentionally adjust investments and goals as income grows. Monitor expenses to ensure they aren’t subtly increasing as income increases. Make growing wealth a part of your budgeting strategy. Regularly inventory assets that are acquired – houses, investments, property, collections, and precious jewels. Developing a roster of assets helps inform what you need to protect and how you will distribute assets to the next generation.
In next week’s blog, we will explore accuracy & control and outside elements. But for now, consider the strategy and the potential application in your personal finances.
Take it one part at a time. Think about the 50% uncomfortable, 70% incremental and 100% vital. StudioM is here to assist. We invite you to schedule a 30 minute consultation. Until we meet…keep working in the change.