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Money and Your Goals

Why the Best Financial Plans Begin with Purpose-Driven Money Management

The best financial plans are driven by a motive much bigger than money. Here's how you can align your values with a money management system, so you can make the most of what you earn.

Woman sitting at desk working on financial plan

Creating (and Maintaining) Your Best Financial Plan Yet

Did you know the average person will spend 90,000 hours working in their lifetime? In contrast, Americans spend less than 2 minutes a day managing their finances, according to a study by Ascent. That's the same amount of time it takes to brush your teeth.

How we spend our time and money reflects what matters to us. But with Americans spending one third of their lifetimes making money, it's easy to live as if money is the end goal. In fact, a study by OnePoll found the average American spends nearly $1,500 on non-essential items per month.

What can we gain if we focus more time on managing what we have?

The Power of Money Management

When you view your financial plan as a tool to accomplish bigger goals, you can:

  • Turn uncertainty into clarity. Many people's fear around finances lies in the unknown. How much money do you spend on groceries around the holidays? Do you have enough to treat the whole soccer team to a celebratory dinner? The more time you spend with your money, the more you will feel in control of your finances.
  • Live in line with your values. When you manage your money on a regular basis, you're doing the work to take care of you, your family and everything that matters to you.
  • Understand your spending patterns. With a little daily attention, you can begin to understand your patterns, uncover opportunities and adjust your cashflow based on what you find.
  • Become a better financial role model. When you have a healthier relationship with your money, you can serve as a positive financial role model for others.
  • Address debt faster. With a money management system, you can stay current on your payments, so you can avoid late fees and comfortably chip away at your debt.

Ready to Get Started? Setting Up a Budget is a Great First Step.

The single most important part of a healthy money management plan is cashflow management, or in less glamorous terms: a budget.

Forgoing a budget could impact influence your ability to pursue bigger goals. According to Nerdwallet's 2019 household credit card debt survey, 2 in 5 Americans are delaying starting a family for financial reasons. And while 20% of Americans spend more time planning vacations than planning their finances, 40% don’t have enough savings to cover a $400 emergency, let alone take time off for vacation.

While it's clear we could use a little more time managing our finances, successful money management is really about how that time is used – where the true goal is to maximize the time you can spend doing what matters to you. A budget alone may not be a sufficient tool, but a budget with a purpose – that's a much better financial plan.

"The difference between a budget and a financial plan is understanding there's really four places that your money can go. You can use it to live. You can give it away, you can owe it to someone else, or you can potentially grow it," notes Clint Jasperson, a Thrivent wealth advisor who serves clients in Colorado and Wyoming.

No doubt, budgeting is the most time-intensive part of a money management plan, but once it’s set up, managing your finances only takes a few minutes a day. If you need support creating a budget, check out our values-based budgeting workshop.

What Comes Next? Chip Away and Make Progress.

If you dedicated a few minutes each day toward managing your finances, you could gain more clarity, security and success. What can you do today to stay on track with your finances?

  • If you have 1 minute: Check your credit score. Sign up for a free credit report tool like CreditKarma.
  • If you have 2 minutes: Check your cashflow with a tracking app, like Mint, YNAB, EveryDollar or Clarity Money.
  • If you have 5 minutes: Reflect on why you really want to improve your finances. What do you value? How will improving your finances help you achieve other goals? Regular reflection can keep you focused on what's important.
  • If you have 10 minutes: Automate monthly bills that are generally consistent, like utilities. You can also review bills you may prefer to pay manually, like credit card bills.
  • If you have 20 minutes: Think about your financial goals, whether you want to stop dining out on weeknights or start a 529 plan for your growing family, thinking about these goals for a few minutes can inspire you to take action.
  • If you have 30 minutes: Do some research to minimize recurring fees. Maybe you'll find by consolidating your savings accounts or removing old subscriptions you could save a bit more toward other goals.
  • If you have an hour: Review your insurance policies and investments. Take a look at your health insurance, property taxes, disability insurance and your 401(k). If you have any questions, set up a meeting with a financial professional to look deeper and find some answers.

Of course, it's not possible or convenient to tackle all these tasks in one day. But if you can make the time to take care of these tasks over a doable timeline, you’ll feel much more in control and clear with your finances.

Looking for some support as you create your best financial plan yet? Connect with a financial professional in your area to take the first step toward healthier personal finances.