If you have found yourself saying, “I need to change my life, but I don’t know how”, then it’s probably time to reflect on what has been happening, take a rest and then start again refreshed.
The way to start changing your life is to ask yourself a series of questions. What would good look like? What do you like doing? What are good at? What does the world need, and what will people pay you for? The answer to these could provide you with a clear purpose.
If you feel like it’s time for a life and financial reset, read on to hear how you can make some of those changes.
Recover from the past mistakes
Whatever has happened in the past is in the past.
Forgiving yourself might be the first step to recovery and change.
Past mistakes in life and money need to be learned from but not dragged around with you all the time.
If you have learned from a previously painful life and financial experiences, it can be tough not to keep reliving them, but this may be doing you a disservice in moving on.
Part of the recovery process will be clearing away what went before.
In the case of your finances, this might well be around previous poor decisions around credit and debt.
The first step will be to try and stop the bleeding.
- Don’t take on any more debt
- Stabilise the debt you have by ensuring you are making the minimum payments.
- Formalise a plan to deal with the debt
- Understand your strengths and weakness around money and play to them – and avoid the temptations by removing alerts on your electronic devices to spend more money.
If you are in a debt crisis, these organisations offer free guidance and support.
Reset your life and finances on the right path
Resetting yourself from past mistakes will require a bit of self-reflection.
Acknowledging what hasn’t worked in the past and taking some lessons from it.
The way you may have managed your finances in the past may not be the best way forward.
The first step is to gather your data.
- What is your net worth – everything you own minus what you owe. This is what, after all these years, you are worth. This may be your first shock.
- What is life currently costing you?
- What is your burn rate? What does it cost you to live your current weekly, monthly, and yearly lifestyle? This is what you need to live.
- What is your savings rate? At the end of the month, how much of your pay is left over
Once you have these numbers, you have your baseline. This is your new starting point. Everything from here will stabilise and build your health, wealth, and happiness.
A couple of big reset processes could make all the difference in your current and future financial lifestyle
- Living within your means – Ok, I know this sounds as much fun as a visit to the dentist, but this is the path to financial stability and beyond. Live within your means to stop taking on any more debt.
- Start paying yourself first. The first thing you need to do is to save first and then spend what’s left, not the other way around. This trick will start to see you grow your savings straightaway.
These 2 steps are the foundations for all wealth building and good life and financial habits.
Refocus on what you really want
Now is the time to get really clear on what you do want.
What you want in the long-term, not just right now, i.e., cake.
What does good look like now and in the future in every area of your life?
- Health – feeling fit and healthy
- Wealth – able to manage the day to day expenses while building for the future
- Happiness – enjoying your life and making plans
Being clear on what you really really want will be part of your happiness journey.
It might take some time and trial and error to understand what really makes you happy, but this process is key to discovering short but, more importantly, long-term happiness.
If everything worked out
- What would you be doing?
- Where would you be living?
- Who would you be living or working with?
- What wouldn’t you be doing anymore?
Why not try and map out what your ideal day, week, month and year looked like and then start making it happen day by day.
Yes, we are often not that great at knowing what we really want but at least making some good guesses will help set us in the right direction and away from the rocks.
Rebuild and renew your skills
Rebuilding your life and finances might well be a process about rebuilding and renewing your skills and knowledge.
What got you here might not get you any further.
Part of your rebuilding process will be to put in place some protection against the next crisis.
As part of your new pay yourself process, you need to build an emergency fund like it’s an emergency.
This is an amount of money, something like 3-6 months or more of living expenses.
If or more likely, when something goes wrong, this emergency fund will help you ride out the rough times without taking on more debt. Your emergency fund should help prevent a crisis from turning into a disaster.
You might well need to learn or renew your knowledge around sound financial principles, including:
- Managing and tracking money (sometimes called budgeting or spending plans)
- Investing vs speculating – long term thinking vs quick buck gambling
- The difference between assets and liabilities and how to create more assets – things that pay you or cost you money.
- Compound interest – how this can be your greatest ally or enemy.
- Understanding how much is enough to make work optional one day and how to get there asap.
You may also want to look a rebuilding or renewing your work-related skills to help you get a new or better job.
New skills might help you pivot to a job or career that better suits your skills and interests, making work feel a lot less like work.
New skills may also help with starting a side hustle.
- Set up a basic website
- Write a blog
- Make YouTube videos
- Teach others how to do the thing they have always wanted to do – that you already do.
Use what you are good at and enjoy doing by selling physical or digital services and products that solve a problem for someone.
Doing this might also make work optional one day for you.
Relaunch your life and finances
This is about starting the new you.
It might involve telling your close friends and family your new way of doing things.
It might even involve hanging around less or not at all with the old influences that got you into your past scrapes.
Relaunching your new life involves taking bold and conscious decisions with your time and money.
It will be a process with mistakes on the way, but ultimately it’s about making a new life for yourself.
Course correcting towards what you really want and away from what you don’t.
By the way, our GAME Plan process is how we help people refocus, rebuild and relaunch themselves with their very own life and financial plan.
Find out more here.
Summary: I need to change my life, but I don’t know how
Recover from what went before. Be kind to yourself and learn the lessons that need to be learnt.
Now you know what not to do
Reset yourself for success with money and life. Gather the info you need to understand where you are starting from and track your progress.
Live within your means and start paying yourself first—two of the greatest financial superpowers.
Refocus yourself on long-term goals and what you want in the short term. Long-term thinking often has a better focus on what will make you happy overall rather than just now.
Rebuild your skills for the new you. These might be financial awareness and planning skills and or new employment skills.
Relaunch yourself to friends and family so they can support you on your new path.
Cut the ties to the old you and habits and build on your success habits from now on.
Anyway, those are my thoughts on I need to change my life, but I don’t know how; let me know yours in the comments below.
Thanks for dropping by.
Life and Financial PlanningHow To Set Clear Financial Goals An...How To Set Clear Financial Goals And Move Towards Them
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More of the same?
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