Or, how the teacher once again becomes the student…
When I talk with financial coaching clients–and especially potential clients–I try to stress that the work is a process. To paraphrase Jack Kornfield, achieving financial health is not a one-time event where you “get dispensed” and then move on. It’s on-going work, which I was recently reminded of in my personal life.
It was nearly four years ago that I convinced my husband that we should work with Mikelann Valterra to take charge of our personal finances. (As I describe here, I’d had fantastic results with my business finances!) My husband was game and so we started tracking our spending using the Money Minder (now online). Through the tracking process, we learned that we spend a lot of money on food. A lot. A LOT. Really, we eat our money. Even though we saw that we were spending a lot of money on food, we decided we were ok with that: We like fancy foods, we like eating out, and it worked in the context of our income and other expenses.
Fast forward a few years, and now our team of two has become a family of three. Having a child has changed, um–how to say this?–EVERYTHING. Are we buying more food? Yes. Are we buying more expensive food, as well? Yes. Do we spend more when we eat out, because Junior needs dinner too? Yes. Are we spending more on everything else? Yes. Has our income gone up accordingly? I wish. Do we have hours of free time to track our spending? Hardly. Is this what many clients face? Oh heck yes.
I decided to blog on this because I think I’ve just had the experience that I think many clients have. I shifted from being in a money fog (which is to say, being unaware of the details of our spending) to being shocked and not a little terrified at what I saw. Yikes! No wonder it felt like money was disappearing–it was!
Why did I think we should have more money than we did? Because I was clueless about our new level of spending in some major areas, specifically food and childcare. (I’m not really addressing the childcare piece, as the disconnect between what I thought we’d spend and what we are spending was due to an inexplicably low estimate on my part.) In the “trees” of grocery store price labels and restaurant entree charges, I’d lost a sense of the “forest” into which those numbers aggregated. Without real-time tracking and conscientious spending, we took our past pattern of eating our money and expanded it just like we’ve expanded our family. The painful lesson? There are consequences to the financial choices you make.
The good news about financial coach training/expedience that I have is that I know how to get us back on course. For the money we’ve already spent, we need to adjust our spending plan for the year to take into account that we’ll be spending more on food than we’d planned. That’s not great news, however it’s reality. Going forward, we need to make more of an effort to manage our food expenditures. This may not be fun, however it’s something under our control. We’ll also need to regularly and frequently track of our expenses, to verify that we’re on track.
Will we keep “eating our money”? Yes. Will we do it at the level that we had been? I bet not, because that number does not make sense for the income and expenses that we have now.