When we’re preparing to file our taxes for this year, it’s the perfect time to create a system to make the process easier next year. Why? You might be thinking, “Ashley, why add to my torture? I could finally celebrate being done!?”
Taking the time to create systems while everything is fresh in our minds is far easier than trying to remember what was important and what we needed. Taking the time to set up a system for our 2021 taxes will save us lots of stress, time, and (perhaps) money.
It might sound funny, but you have a relationship with money just like you have a relationship with anything else. It’s how you interact with and relate to money.
Our relationship with money is created over time and can be influenced by many factors. We are guided by how our parents interacted with money. We’re also shaped by mentors, teachers, friends, our experiences, and society as a whole.
Filing our taxes can be an arduous process that we often try to get through as quickly as possible. But before we hit submit or give our accountants the final okay, we want to make sure we are minimizing our tax bill (or maximizing our tax return).
Why? First and foremost, that means we’ll have more money in our pockets to allocate towards our goals. And second, if we don’t, we’re paying more taxes than we need to.
One of the most important parts of your financial plan is your goals. In order to find clarity and reduce our guilt around our spending, we have to have clear goals. That means knowing how much we need for each goal, by when we will achieve it, as well as which goal comes first.
Is it more important to me to pay off ALL of my student loans before saving for my future home? Do I want to aggressively save for retirement (and retire early!) or take an extra vacation each year?
Throughout centuries of history - over and over again - the Black community has been stripped of wealth through policies, massacres, theft and destruction.
According to the 2016 Survey of Consumer Finances, the median white household has a net worth of $117,000 - 10 times the median Black household net worth of $17,100.
It would take 228 years for Black families to amass as much wealth as white families if our current policies stay in place.
When it comes to our financial lives, we often focus on ourselves, but our environment and those around us play a big part in our actions - and often not for the better.
Environmental toxins are the people, places, and things that get the best of your spending. Maybe it’s a friend that you shop with that always encourages you to “treat yourself” or the store you tend to impulse shop online. It's not personal - it just means your spending gets off track when you’re together.
With a very unpredictable 2020 finally behind us, it might seem futile to attempt to draft a 2021 financial plan. How can we possibly predict what’s going to happen? Isn’t this a waste of time?
While plans can and will change, starting the year with a vision for what we want to happen in our financial lives can make all the difference. It’s also always worthwhile to gain awareness of and clarity on how we’re spending and allocating our money.
If we’re being honest, most of us have no idea where our money is going.
Many of us don’t want to look because we’re afraid of what we might find. When I first started keeping a money journal, I found out that I spent $200 per month on frozen yogurt. I was shocked. That was $200 per month and $2,400 per year that I’d much rather be allocating somewhere else.
Most of us know the feeling - we make a purchase we regret and it sends our spending in a tailspin for a week, month, or even years. Next thing we know, we don’t want to look at our credit card statements, our account balances are decreasing, and our stress is on the rise. How do we stop the bleeding?
One of the most effective ways to get our spending back on track is with a regroup. We need to give ourselves a chance to get our money mindset back where we want it.
One of the things I discovered very early on in my money journey is that being good with our money isn’t just about the numbers. Yes, I didn’t know what I was supposed to do with my money but even once I did learn and decide what would work best for me, I wasn’t taking action that aligned with that plan. And it’s not like it was too complicated or confusing.
I wanted to spend less money than I was earning (and at the time I had a steady paycheck) and have some money leftover to save. That’s it.
Why didn’t it work? How we interact and behave with money (aka our relationship with money) has a lot to do with our emotions and beliefs.
