INSIGHTS (on leadership/self-leadership)
Given sky-high inflation and how painful it feels, it’s a good time for some positive-minded reframing. Here are five signs you’re doing better financially than you think you are:
1. You have clear financial goals and some financial flexibility.
This is no small feat. Research shows only 30% of people have a clear, long-term financial plan and that the majority would have difficulty covering an unexpected $400 cash expense.
2. You believe it’s not about net worth, but net worthiness.
An increasing net worth (your assets/what you own minus your liabilities/what you owe) is a good thing, and a basic measure of how you’re doing financially year to year. But freeing yourself from net worth goals and comparisons is a sign of financial maturity and perspective — and a different kind of success. I’d suggest the pursuit of net worthiness instead. Did you live a life in which you were fine financially, but, more importantly, that was focused on adding value to something bigger than yourself?
3. You don’t fight over money with your partner.
Many couples’ worst fights have been about money. If you’ve avoided this, you’re doing something right. You prevent fights about funds by having a mutually agreeable goal and plan, over-communicating about it, and sticking to it.
4. You spend for needs and save for wants.
I’m not saying never buy things just because you want them. I’m saying be cognizant of when you’re spending on a need versus a want, and be careful with the balance between the two. Saving for wants helps curb the need for instant gratification, which gets many people into financial dire straits. And saving for wants serves an alternate purpose — using the savings instead for an emergency fund if needed. Most financial advisors will tell you saving three months worth of income is a good target for such a fund. If you have – success.
5. Debt is a thing you manage, it doesn’t manage you.
It’s a real victory if you can pay off credit card balances each month, maintain a good credit score, and keep a good debt to income ratio – your monthly bills divided by your gross monthly income. (From my early days as a mortgage underwriter, I know a ratio of 36 percent or lower is a good target).
IMPERFECTIONS (a mistake many make)
Have you ever engaged in emotional hygiene?
Many make the mistake of not doing so. Emotional hygiene is when you tend to your emotions, much as you would a physical wound. As a Nobel prize winning scientist told Harvard Business Review, you “clean and bandage” your unhelpful emotions (i.e. not letting them fester and helping them heal) by being mindful to:
a) ensure they don’t turn into paralyzing self-doubt or, b) unproductive rumination.
So, remember to practice emotional hygiene, and you’ll ramp up your resilience.
IMPLEMENTATION (one research-backed strategy, tip, or tool)
Here’s an unusual tip for feeling more connected to your fellow human beings, and less lonely and isolated in general – no small feat in today’s divided, distanced, world.
Take a moment to ponder some of the incredible first images from the new James Webb telescope. Here’s one:
You’re reminded of the astonishing vastness of the universe, and how small our planet and species really are in the vast scope of things. But in that smallness lies a sense of profound connectedness. We’re all not so far apart and foreign to one another as we often think. We’re a unique collection, a special drop in the fathomless ocean that is the universe, marked with far more similarities than differences. As New York Times guest writer, Shannon Stirone, said, images like this “remind us of our inherent connection (to one another).”
And isn’t that something we all long to feel more of?