How a money tracking app helps you manage your money with live coaching
Financial coaching is a beautiful hybrid of practicing better money habits, implementing better money management strategies, feeling better about money, and stressing less. It’s not a highly regulated world, so there aren’t perfect standards among coaches. However, the best coaches help their clients see themselves in the big picture of their money management and break down high-level financial goals into micro-behaviors. They help clients identify their relationship to money, blocks, triggers, and general behavior.
They then craft a monthly financial literacy training program around the key areas where a person needs growth.
So here’s how a money coach inside the Nav.it app can help you:
Mindset and Mentality
You have to get your head right. We all have inherited money beliefs, triggers, and habits from our parents, childhood, and society. Assessing what you want from your money and then what you do with your money is the first stage.
Do you want to grow your money into millions of dollars, do you want your money to sustain a comfortable lifestyle that includes travel, or do you want to become a real estate mogul and own rental properties around your hometown?
What is actually happening now?
How can we train you mentally to get from your starting point to where you want your money to end up?
You have to know where to start before focusing on the end goal, even if you define the end goal from the beginning. Do you want to feel more confident in your ability to generate money? Or do you need to reduce spending and live within your means? Pay off debt? Buy a house?
Once you have identified the larger goals, we work backward to break down the behaviors needed to get there.
You want to buy a house, but your credit score is below 650, and you only have saved 5% of the down payment. The plan then becomes focused on: How do we get your credit score up and start saving more for a down payment?
Improving Money Habits
Small daily or weekly behaviors and the lifestyle they create for themselves affect people’s larger goals. First, you have to start small to grow large. Just like training for a marathon, you start by running 3 miles in a row and building up from there.
If you leave $500 on your credit card each month but want to live within your means, start with a micro-activity. Look hard at your expenses and your relationship to those expenses each day.
Analyzing How You Spend and Save Can Help You Improve
And sometimes, that only takes reviewing your transactions. Revisiting transactions and deciding which ones serve or drain you is a powerful way to identify WHY you spend money the way you do. That facilitates deeper conversations about what lifestyle you want versus the lifestyle you are living.
Once you have the basics down and know how money is coming in and going out, the next step is taking time to practice whatever habit change you’ve identified. Is it not allowing your kid to whine their way into extra toys at the store? Is it turning all the lights off at night before bed and reducing the heat to save on your electricity bill? Whatever you’ve identified as a micro habit you can build, give yourself a minimum of two weeks to try them. You’ll start to reprogram your brain waves and feel like you can make a change.
Measuring and Tracking Improvement
The best part about money is that it’s straightforward to set goals and measure your progress. If you said you want to eliminate 10% of your non-fixed expenses this month, it’s easy to calculate if you did it. Especially if you utilize an aggregator app like Nav.it, where you can see all your transactions in one place.
If your goal is to save $100, you can set up an automated transfer throughout the month and then look at the balance at the end of the month to see if it’s in there. We are a species that functions based on positive or negative rewards. When you see that money and are happy it’s in there, you get endorphins rushing through your brain that reward you for your behavior and compel you to do it again.
The true test of resilience is when it’s NOT in there. That’s when your brain wants to trick you into thinking the situation is hopeless and you can’t achieve your goals. A financial coach can be there to help you recover and readjust.
Measurement and tracking are critical parts of positive reinforcement.
Seeing your savings accounts grow or your high-interest debt reduce month over month reinforces the behavior that gets you there. The key is to realize you’re playing the long game with your habits and goals. Setting realistic expectations is necessary, as is allowing yourself to miss the mark sometimes. You’re not going to pay off $5,000 of credit card debt in one month, but if you have a solid plan for each month, you could do it in 6 or 8.
Half of a financial coach’s job is to be there when the person ‘fails’ and help them see they can keep moving towards their end goal. Like life, you’ll have bumps and bruises on the road to happiness. Resilience training helps us know what to do in the bad times as much as the good.
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*Just remember, we are NOT your financial advisors, tax advisors, or legal advisors by simply accessing this site. Everything that you read or interact with on the site is for informational purposes only. You should contact a professional before taking action.