Start with your finances!

Photo by borman818

Yesterday’s post was “You have to START to finish!” I promised to continue the theme of starting to finish. If this is a blog written by a professional resume writer, why then is my first topic about finances and not job search or resume writing or career planning?

Money and finances are such a core of why we work that addressing the topic of finances first will help with other areas of planning and goal setting as we go on in other posts to talk about “starting to finish”. Many people go through life with a blurry-eyed way of dealing with their financial picture and fail to understand the implications of their financial choices.

A job loss example

When individuals or families are hit with challenges like job loss, the financial picture is the one that suddenly comes to the forefront. Panic sets in! I can remember a couple coming in together to hire me to write the husband’s resume.

I struggle to remember their names today because it was so long ago but I remember the wife breaking down in tears. “We will lose the house!” she sobbed. Now, the husband had only lost his job a few weeks earlier and he did qualify for unemployment. He lost his job during a good economic period, unlike our past three years of global economic crisis, but the wife was still terrified.

The outcome? After I wrote the resume and coached the husband on how to look for a job successfully, within 3 weeks, he was working again in a new position. No losing the house, no reason to panic. But panic she did.

What can be done to prepare for financial challenges?

COMMUNICATE: Most people hate talking about finances and it is the core of much financial strife. Typically, in a marriage or relationship, one partner has stronger financial skills than the other. In my marriage, my husband abhors talking about budgets, finances, tracking checking accounts, or anything else in that topic.

I started my career working for a savings and loan for three years. This, coupled with my own desire to understand finances, put me in charge of our finances. However, it also left me alone to review accounts, think about budgets, and plan for the future. Now (after 30 years of marriage) I am finally getting Bill to look at QuickBooks accounts and spreadsheets. He still hates it but it is starting to make a little sense to him.

Take some time to talk about your finances with someone you trust. If you are single, find a family member, good friend, or better yet, financial expert to talk with and develop plans.

USE FINANCIAL TOOLS and SOFTWARE: Today there are so many options. Personally, I use QuickBooks to track both my personal accounts and spending as well as Design Resumes finances. For 20 years, my husband was a remodeling contractor and so we had another QuickBooks account for his business.

I also have a massive spreadsheet that I started in 1996 to pull together monthly expenses from all sides. The Excel spreadsheet listed all the expenses for each month and organized it by due dates so I had one source to make sure all the payments were made. This spreadsheet also gives me a way to easily track where I am in my full financial picture. I can see at a glance what my total debt is and I update it regularly.

PUT MONEY IN SAVINGS: You’ve heard of saving for a rainy day. Despite working for a financial institution in my early years, I never followed the first rule of financial planning. Put some money in a savings account every month. What will that do? You will then have a plan if you do lose a job or something unexpected happens to your car or house. It is easy to live paycheck to paycheck but that’s what really hurts when life hands you challenges.

REDUCE YOUR DEBT: This for me is a little like the pot calling the kettle black. 2010 was such a year of investment into Design Resumes for me that I have much ground to cover to get back into control with my debt load. I remodeled the office, traveled to conferences to meet colleagues and gain career industry education, I invested in sound advice in marketing, and I also did some other home improvements like a new furnace.

What will I do different in 2011? I will work at paying down debt and building savings. I will make sure that any new expenses are absolutely necessary. My ultimate goal is to be debt-free because that will give me the freedom to live my life under my own control.

If you reduce your debt and carefully scrutinize new purchases, you will find that if disaster or job loss strikes, you can face it with confidence instead of fear.

STAY ON TOP OF YOUR FINANCES: Even though I have all of these tools available, I haven’t been using them to their full capacity and I often get buried in other things. Yesterday, I updated my spreadsheet for December and it took me about 3 hours. Why? because I let it get out of control. Updating it every few days or even daily would have gotten me on track and saved me a ton of time.

If you follow these suggestions, I think 2011 will be a year that you can remember fondly as one that you built a foundation for the future.