A new year is upon us, and with that comes the natural desire to look back on what we’ve done with our money: have we accumulated the wealth we’ve wanted? Stuck to the savings plan we’ve designed? Spent in a way that is in line with our goals? Big questions like these can seem overwhelming at this time of year (especially after the holiday spending season).
Reflect on the Money in Your Life
That’s why anniversarying, or reflecting, with a client is something I make sure to do throughout the year, not just at the end. We look back and think about all the little things you’ve done to improve your situation. Maybe you’ve built awareness around your cash flow? Maybe you’ve pushed yourself to save a bit more or tackled a lingering debt? Whatever the case, reflecting on the small, incremental changes can show you how much they add up over time.
In my experience, the importance of this kind of process can’t be overstated. For example, a client came in feeling unfocused and unsure about how they were doing with their money. When we sat down and looked at the numbers, their net worth was $150,000 — much higher than the previous year! They had followed their savings strategy but didn’t really feel that progress was actually being made when in reality, they had made tons of progress. Having as much information about your money as possible influences how you feel about it — almost always for the better.
Net Worth: A Snapshot in Time
The last point I want to emphasize is that anniversarying puts your net worth into perspective. I encourage my clients to think of net worth as an expression of their trajectory, something that marks how their work is adding up. Through consistent reflection, we start to understand that net worth simply shows us a snapshot in time, and isn’t something set in stone. That kind of attitude gives us a bit more breathing room when looking at the bigger picture of money in our lives.
So as you ring in the new year, plan to set aside the time to connect with your money on a regular basis. Ask yourself, How is your money serving you and your life goals? How can we work toward making this connection clearer in the new year? How does this progress tie into what you want to actually be doing vs. just being a monetary milestone? If you stick to it, by the end of 2020, you’ll look back confident in the progress you’ve made.
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Jim is a financial advisor and owner of Thinking Big Financial, Inc. Thinking Big Financial is a fee-only registered investment advisor offering financial planning and investment management services. Specializing in working with the LGBTQ Community.
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