March 23, 2021
When you are unsure how to proceed or are feeling lost, you turn to a map to help you find the way. A personal finance map works the same way. It helps eliminate unnecessary complications, emotional turmoil, and pressure by giving you a simple philosophy to turn to when you have to make financial decisions.
Your money map can look any way you want it to. You can take this exercise literally, and draw something like this:
Or you can create a guideline that works for you no matter where you bank or what your current bills are. Here’s how to start:
You may have set intentions for other parts of your life before, but here’s a refresher: an intention reflects a purpose or attitude. Intentions focus your mind and direct you on a very high level towards your goals. They help you go about your day with a mindful focus on what you want your future to look like, so you can take action to move in that direction.
An intention is less specific than a goal – it’s more like an affirmation that is used to quickly remind yourself of your goals. Your intentions can be condensed in ‘bite-size’ pieces so that whenever you run into an obstacle, your money intentions can help you refocus your efforts. Without clear money intentions, it can be easy to push your goals to a dusty corner of your mind when things become more challenging.
Here are some examples of intentions you can set for your finances:
Money is a tool to expand the opportunities in my life.
I don’t have to spend money to make other people happy.
What I own is enough.
I can become financially free.
When you’re creating your intentions for your money, you’re also doing part of the work required to establish your personal core values. The two are linked and have to go hand in hand if you want a true personal finance map.
Core values are the guiding principles that we live our lives by. All of us have core values that we subconsciously adhere to, but it’s a good idea to take the time and effort to uncover these values as we develop and grow.
It’s important to write out your personal core values when making a money map because:
Ever wonder why you find it easier to accomplish certain goals than others? When you use your core values to create goals, you are much more likely to actually achieve those goals. For example, if you set a financial goal to save enough money to travel around the world at your leisure but don’t ever seem to get around to saving for it, it might be that you perhaps set the goal out of peer pressure or to keep up with what you’re expected to want rather than any true desire.
It’s estimated that the average adult makes about 35,000 remotely conscious decisions each day. Things that you might not even register on a conscious level, like which shoelace to tie first, or where to put your water bottle after taking a sip, end up exhausting our brain by the end of the day. Your core values take away some of the stress and indecision that comes with daily life, by giving you a go-to answer for any financial decision. The decision literally becomes a ‘no-brainer.’
This one seems obvious at first glance. But remember that corporations spend billions of dollars a year to confuse the two in your brain. Sometimes our emotions get the better of us when it comes to finances. This is when creating a budget comes in handy. It can even help to separate your expenses into two portions: discretionary and nondiscretionary.
Non-discretionary expenses are your basic needs like food, housing, health insurance, and transportation. It’s basically everything you need to stay alive and function in society. We would also argue here that your future needs are also non-discretionary, which is why retirement savings should be a part of this section of your budget.
Everything else is a want. These are things that make life easier and enjoyable like your Netflix subscription, gym membership, that extra side of spring rolls in your takeout order, etc. Wants aren’t always frivolous spending (and we should try to stay away from that terminology in our finance map) – but they are items that you could live without if you don’t buy them.
Bonus: Make A Vision Board For Your Finances
It’s important to have a reminder of all the work you’ve done so far. Whether physical or digital, create a visual space for your personal finance map. It could be something simple like the drawing below, or a vision board with pictures and phrases.
Vision boards are collections of photos, quotes, and objects that depict things you want to accomplish in your future. In this case, it’s basically a visual representation of your goals and hopes about your money. There are many examples online of personal finance vision boards, and it can be a fun project to see how other people’s financial goals differ from yours. It’s important to be confident about your personal core values and intentions when browsing, however, so as not to confuse someone else’s financial goals with yours.
Being able to see exactly what you want to accomplish gives you something to work toward as opposed to just letters on a page. This vision board should directly lead into your financial SMART goals, which we go over in this article.