4 Steps to Lasting Change in Household Finances

One thing that I come across regularly is that people want to make a change in their money management, but they are not sure how to do it, or even if it’s the right thing to do. Budgeting seems like a very unsexy thing, savings goals gets yawns instead of yays, and financial freedom sounds like old people talking.

Whether it’s selling a house that’s costing money, moving to a new job, or taking time off work, these unknowns can really make it hard to make a decision one way or another. Money management is more than just the basics, and creating a working system for your family is key to success. We know change is hard, and yet it has some great rewards. Especially when it comes to finances! 

I’ve coached people through financial transitions and also have run my own accountancy firm for a couple of decades now. I love to talk, so listening to what my people need, and then finding ways to help them is a core part of my business.

Change is hard, but having someone to help you through it improves your chances of success. And someone who’s reassessed and then changed her entire life? I have a wealth of experiences you’re welcome to access.

Some of the steps I help people with include:

1. Identifying pros and cons of money management decisions

A great pros and cons list can help show you exactly what your thoughts are right now. I find that just by writing it down and getting it out of your head, there’s some more clarity than what you had previously had – because your mind can’t see a nice organised list.

Sometimes a list will be obvious – and sometimes you may need to keep adding to it over a few weeks and conversations. Past budgets and current bank statements are also a handy tool to build a good idea of what might be affected by the decision you're facing.

This is also a great way to get input from your partner. Discussing these important things means you’re both on the same page when it comes to finances, and it helps develop a trusting, loving relationship that lasts for decades. 

You may not realise that you have different savings goals and priorities! So talk! 

2. Identify any short or long term tax consequences on your budget

As a tax agent as well as a money coach, I can help you see where there will be any tax implications and help to calculate what you may need to put aside. There’s no surprises then! Leveraging your tax consequences now can lead to financial freedom later.

Have you heard of Capital Gains Tax? When you sell an asset, the ATO would like a share of the profits from the sale, thank you very much. However, if you’re smart, you might be able to save thousands in tax. 
For example, being aware of your timing and selling one CGT item before another can reduce your tax, so it’s always worth a quick check with your accountant before you sell. And then there’s financial years to consider too. If it’s close to the end of a financial year,  would it be beneficial to sell this year or the next?

3. Short and medium term cash requirements for spending

Having an understanding of what you spend now and what you might spend into the future can help you plan better and make the transition less scary. Knowing your comfort levels about what you want as a backup or buffer amount means that you can set targets for when the change can happen.

For example, my husband wanted to have at least a year off work. To feel safe and prepared, I wanted to have at least 18 months of household bill money stashed away. Being aware of that figure meant that we could work towards saving that amount, track it, and know the month when he could resign from work. Yes, I retired my husband! 

4. Ask for Help 

Don’t be afraid to look for support, ask for help, or expand your knowledge. There are people out there who love to help, and can do so in ways that work with you and your family. Check out the topics of money management, budgeting, and financial freedom at your local library!

Read books, attend courses, speak with friends, and ask questions – especially of experts like me. The only silly question is one that doesn’t get asked! Sometimes coaches and mentors can help you see exactly what’s going on inside your finance system, and sometimes we simply offer guidance or emotional support as you take these steps to plan the next move.

If you’re ready to build a happy home with finances that work to support you and your family, then grab a free chat with me and let’s talk. I’d love to meet you!