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Cash Flow & Quality of Life

So you're thinking about making a few financial resolutions in 2016. Perhaps it's your first year out of school and you're finally earning your own money, or maybe you've tried to change your financial habits in previous years and, like so many of us, gone right back to your old ways by February 1. Most people make resolutions that are tied to self-improvement in some way, whether going to the gym and losing weight, eating out less, or saving more money.

To help you avoid the classic resolution boom-and-bust cycle, try thinking of them a little differently. The typical health and wealth resolutions are all quality of life issues. Instead of thinking of them as new hard and fast rules to impose on yourself, think of how much better you're going to feel if you work out more often and eat better. Think of how much easier it will be to sleep at night if you know where your money is - and you're socking some away for the future. Think of how much less stress you'll have in your life if everything is organized.

We see many clients in our office who are making money, but have no idea where it's going. And not just in January, but throughout the year, we see that boom-and-bust approach over and over again: you work really hard at something for a short period of time and then fall away from it, whether that be investing in the stock market, hitting the gym, or keeping up with your social life with friends and family.

Our approach is to organize and plan. Map out two or three days each week you'll go to the gym instead of telling yourself you'll go every day. Start with the basics of personal finance, what we refer to as the "sleep at night" factors: your emergency fund, and saving for retirement - yes, you need to start now. We'll customize a plan based on your needs and budget, and make sure it doesn't strap your cash flow so that you'll give up by Valentine's Day.

Speaking of cash flow, why not make one of your resolutions to become better in control of yours? We can help you look at your lifestyle, your goals and where your money is going, and create a plan that you're comfortable with. My generation loves to automate things, right? Automatic deposits and debits make it easy to lose control of your cash flow. Revisit all those automatic payments and cancel the ones you're not using. (And yes, that means cancelling that gym membership this summer if you do give up on pumping iron every day!)

Right now, when you're out of school but haven't started a family of your own, is the perfect time to really take a deep dive into your financial picture - both current and future. When kids do come along, everything seems to get focused on them, and that's great. But resolve now to take care of yourself first. There are no loans for retirement.

For any newlyweds or engaged couples reading this, take some time now to look at your cash flow not just as individuals, but as a couple as you start the process of merging two budgets. Good communication with yourself and your future spouse will only increase your quality of life together. Be honest about your finances, and talk with your significant other about his or her financial history and family lifestyle. We see many couples disagree about money simply because their families approached money differently.

And if you're worried about having that conversation, give us a call and let us help you. Having a third party who won't judge can make the environment feel safe for both parties. We've seen many different situations and scenarios, and we can apply our knowledge to your unique set of needs.

Finally, please don't keep us a secret! If you have friends who are recently out of college or planning a wedding this year, pass this email along or send us their name so we can add them to our email list. We're here to help.

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