Week 5: Communicating about money
|
Week 5 is all about communicating about money with the people around you and working as a team on this stuff!
One of the biggest reason for divorce is money. If we can operate better, communicate better and work together it is amazing the progress we can make together with our finances. The YouTube live of the course is to the right and join Katie and Alan as we talk understanding others, talking about money and working as a team. Thanks for being part of the Rebel Finance School and full resources for this week's course are below! |
|
Course notes
The three key elements we covered were...
1. How to communicate with the people around you about money
Everything you want in life is done with and through other people. With this in mind one of the most important things you can do is to work to understand your friends, your family and your partner if you have one. The better your communication around money the easier your progress will be.
One of the first elements we looked at was the differences in how we operate around money. We introduced four scales to highlight some of those differences. Homework alert.... team up with another human, mark where you are on these scales and discuss the answers:
Katie and I found it eye opening working through these and started to understand why we argue sometimes. Katie and I are at opposite ends of the spectrum on motivation and big picture versus detail.
Understanding this helps us both to flex our styles so we work better together
One of the first elements we looked at was the differences in how we operate around money. We introduced four scales to highlight some of those differences. Homework alert.... team up with another human, mark where you are on these scales and discuss the answers:
- spender vs saver
- past focused/present focused/future focused
- towards motivated vs away motivated (the carrot and the stick)
- big picture vs detail
Katie and I found it eye opening working through these and started to understand why we argue sometimes. Katie and I are at opposite ends of the spectrum on motivation and big picture versus detail.
Understanding this helps us both to flex our styles so we work better together
Identity warning: This is not an excuse for you to "label" yourself a spender so you don't have to change. Non of these things are labels they are just ways of thinking about our behaviour. We all have default positions that we get stuck in that we can work on and change. Just because you focus on the detail first doesn't mean you can't look at the big picture or even train yourself to start with the picture.
The second thing I really want you to get is that none of these things are either good or bad. Being a spender is not good and being a saver is not bad. They are just habitual ways of behaving that lead to different results. If you have fallen into a spender habit then you will find spending easy and saving difficult and vice versa. Both patterns have different outcomes and side-effects. This exercise is about noticing you and your families default ways of operating and then working together to be more flexible!
The second thing I really want you to get is that none of these things are either good or bad. Being a spender is not good and being a saver is not bad. They are just habitual ways of behaving that lead to different results. If you have fallen into a spender habit then you will find spending easy and saving difficult and vice versa. Both patterns have different outcomes and side-effects. This exercise is about noticing you and your families default ways of operating and then working together to be more flexible!
Alignment Levels
The alignment levels give us a tool to be able to look at our own world or that of our family/partner and to discuss different issues we have. Most people try and solve issues they are having at the behaviour level (i.e. you are spending too much money, not tracking) and don't realise that the issue is at a different level such as identity (I am not good with money)
Here are the levels and a description of them.
The real power of this piece of work is to help us get alignment internally and then with other people. If you are working to get to financial independence (mission) and you believe that are wealthy people are crooks (belief) then you are going to be torn as you work on this. You are going end up finding it difficult to follow through or having self-sabotaging behaviours. if you can work on alignment together and internally you will find making progress on your goals and vision SO MUCH EASIER!
Practical things you can do in this area are:
This Mad Fientist interview shares Jill and Brandon's story of how they found alignment.
The pre-work money belief survey is an interesting exercise to do with your partner or family. Fill it in independently and compare your answers.
The alignment levels give us a tool to be able to look at our own world or that of our family/partner and to discuss different issues we have. Most people try and solve issues they are having at the behaviour level (i.e. you are spending too much money, not tracking) and don't realise that the issue is at a different level such as identity (I am not good with money)
Here are the levels and a description of them.
- Mission / Vision - Where are you heading as a couple, family or individual? Do you have a vision for life in the future?
- Identity - who are you? Are you good with money? Do you enjoy maths and spreadsheets?
- Values/beliefs - what is important to you? What do you believe to be true?
- Capabilities - what skills do you have? Have you developed spreadsheet, investing or communication skills?
- Behaviours - what are your daily habits?
- Environment - where do you have your monthly finance meeting? Is the environment conducive to good conversation and focus? What type of people are you surrounding yourself with?
The real power of this piece of work is to help us get alignment internally and then with other people. If you are working to get to financial independence (mission) and you believe that are wealthy people are crooks (belief) then you are going to be torn as you work on this. You are going end up finding it difficult to follow through or having self-sabotaging behaviours. if you can work on alignment together and internally you will find making progress on your goals and vision SO MUCH EASIER!
Practical things you can do in this area are:
- Develop a vision for your future. Share and discuss. The Donegan way of doing this is to each create a PowerPoint answering a question like "What do we want life to be like in retirement?" and then discuss the answers!
- Work through the scales above and discuss - the first step to making progress is understanding. building trust starts with understanding your family and the people around you. Only then can you work on getting alignment.
- Start conversations about money by asking questions. Your mission is to understand the other person first
This Mad Fientist interview shares Jill and Brandon's story of how they found alignment.
The pre-work money belief survey is an interesting exercise to do with your partner or family. Fill it in independently and compare your answers.
2. The monthly finance meeting
Each month we review our finances by updating our net worth spreadsheet and looking at our spending for the month and working out our savings rate. Then we ask ourselves these questions:
- Any surprises? Where are you spending more or less than you realised?
- Is your spending in line with your values?
- Where could you spend less if you wanted to?
- Where could you spend more if you wanted to?
- What went well this month?
- What was a waste of money?
- Are we happy with the direction of our net-worth?
- How does spending compare to last month?
- How does savings rate compare to last month?
- Any wins to celebrate?
It doesn't matter HOW you track your net worth and spending. It's just important that you do it! If you need help on practically how to do this, we've made templates for you. Check out week 1 and week 2.
The key to making this all happen is to schedule the monthly finance meeting in the calendar with another human being. Get it in the diary and make it happen. Consistency is the main goal. Monthly focus on your finances will create focus and energy.
3. How to stay on track
Choose someone to do the monthly meetings with so that you can hold each other accountable. Schedule it in each month and make it fun! We like to do ours over a leisurely breakfast. How might you make it fun and exciting for everyone?! Post in the Facebook group if you want to find a Rebel Finance School buddy to do your monthly finance meetings with...
People always do more for other people than they will for themselves. To take advantage of this commit to doing it with someone else, commit to helping someone else, commit to making it happen and that will hold you accountable.
Week 5 homework
To get the most out of this course you must do the homework (plus homework is fun!)
So here is the homework for week 5...
Ask for help
Remember to reach out in the Facebook group with any questions you have or if you get stuck. Don't let confusion be an excuse for not progressing with this stuff. We are here to support you!
So here is the homework for week 5...
- Choose who to do the finance meeting with
- Schedule the finance meeting for next month
- Set up a recurring calendar invite to make sure it's set for future months
- Have a conversation about the future with your partner/family/friend
- Do the four scales exercise with another human and discuss your answers
Ask for help
Remember to reach out in the Facebook group with any questions you have or if you get stuck. Don't let confusion be an excuse for not progressing with this stuff. We are here to support you!
