Early stages toward financial freedom can be incredibly bumpy when pursuing alone. If your pride comes before asking for help, you are digging yourself deeper into debt. Having a solitary mindset can set you back years from achieving financial independence. If you don’t do what you said you were going to do, who keeps you accountable? That’s where having a money buddy comes into play.
If you’ve experienced any of the following, you probably need a money buddy:
1. You feel alone on the path
2. You don’t see your blindspots
3. You aren’t challenged
4. You lose sight of the “big picture”
5. You forget your goals
6. You need instant feedback
7. You are too hard on yourself
8. You don’t know the next step
9. You need accountability
10. You lack discipline
Is Accountability Important?
From a financial perspective, how does one stay accountable to their goals? Ever heard of the “Law of Attraction”? That term is thrown around as if you need some magical power to possess it. Just attract what you desire and it’ll fall onto your lap someday. Is it real? Yes but that can be a little misleading. Just listen to all the millionaires in the world, they attribute much of their success to an inner belief that they would make it one day. That belief drove them towards their dreams. They weren’t exactly sure on the “how” but they had a “why”. But having a burning desire to achieve, by itself, isn’t enough to make a dream become reality. A very important component is missing from all of this.
Accountability plays a vital role when the realization that where you are in your current situation is NOT where you want to be in the future. It takes a lot more than just thinking about your ideal position. It takes substantial action backed by the practice of keeping you accountable towards your goals. Only then will those goals be realized.
But holding yourself to a higher standard can be difficult. Falling back on ourselves doesn’t hurt just us. It affects those we care about most, the ones we should be supporting and providing for. Your loved ones take a hit when you don’t expect more from yourself. If you’re having difficulty with accountability, it’s time to find a money buddy. Someone who will recalibrate you when needed. Here are 10 reasons why you need a money buddy.
1. You feel alone on the path
Still working a full time job but desire financial independence? The road can be a tough one. It’s even tougher when going at it alone. You probably feel burnt out from the everyday hustle that you forget to make time for yourself. All your dreams are put on the back burner because you have a responsibility to provide for your family. Clock in, clock out, and collect a paycheck.
You ask yourself, “If you don’t support them financially, then who will?”
The more important question is, “If you don’t follow your dreams, then who will?”
The road to FI can be lonely but it doesn’t have to be. Success was never meant to be achieved alone. Everyday, groups of people are accomplishing amazing objectives that would have been extremely difficult by themself. Those people are no different than you or I.
2. You don’t see your blindspots
This may not be your first journey into personal finance. Maybe you’ve looked at improving your financial circumstances like paying down debt or saving for a family trip and were unsuccessful like myself. I’d make excuses like, “That grocery budget just crept up on us. We’ll get it right next month!” or “Let me just use this savings to pay off the credit card instead. We can postpone our trip.”
In reality, these were financial blindspots I avoided so I could keep living a comfortable life. These “accidents” happen all the time to families. But you don’t know what you don’t know. You don’t know you’re paying that “tiny” expense every month because you never check it. Grocery shopping is never planned for, it just happens. These are examples of financial blindspots and unless you are aware of them as they happen, you will always miss them.
3. You aren’t challenged
If you spend more than you earn on a consistent basis but pay your minimum payment every month, nothing happens to you. No one checks on you. The credit card company doesn’t come after you. No one else is reading your statements and checking your balance. But if this continues, you might have to borrow money to keep your family afloat or, even worse, file for bankruptcy. Not the ideal situation to be in. How does it get that far?
If you have free reign to spend your money however you feel, where are the “checks” and “balances”? They have to come from somewhere. With great power comes great responsibility and the ability to accept someone challenging you.
4. You lose sight of the “big picture”
When you start out, you set these big goals for you and your family. You wake up driven and your attack goals every single day. You tell yourself “This is the one!” Day in and day out you push yourself to learn, improve, and grow. Time passes by and then something happens along the way. The progress you hoped for doesn’t match with reality.
Debt keeps climbing. Income hasn’t trickled in from side hustles. Investments plummet. Your finances are in shambles.
It seems as though everything you’ve done up to now was pointless. But it wasn’t. The path wasn’t meant to end here, it was meant to end with financial independence, right? Every single moment, as small as it might be, is just leading you toward your “big picture”.
5. You forget your goals
Picking up side jobs, working full-time, exploring the world of personal finance. None of these are simple tasks. With raising a family, these become more and more difficult. But these are important because they supplement your financial goals too.
If you desire more income, a side job can increase that. If you need to support your family’s financial needs, a full-time job will provide that. If your goal is to achieve financial independence, then learning personal finance will help that. The everyday minutiae can seem insignificant. But remember goals are what drive discipline and that discipline will drive your behavior.
6. You need instant feedback
When you approach a crossroad involving your finances that you’ve never encountered before, you feel stuck and unsure. Your decision to choose one path may spark FOMO (fear of missing out) on the other. Some people will freeze at this point while others regret choosing the path they did.
Many people will wonder what they could have done differently. They need the reassurance that they made the best decision for their situation. That their decision was based off of thinking through the various outcomes and choosing the right one. While some can live with their decision, others need a sense of acceptance from someone other than themself.
7. You are too hard on yourself
All the necessary energy exerted towards a goal can feel draining. It can affect a person physically, emotionally, and mentally. When one’s energy has been depleted, negative thoughts will creep into the mind.
“I’m not good enough for that promotion.” “Debt is everywhere anyway.” “Working another 30 years isn’t that bad.”
Thoughts like these will propel a person toward their goal or push them far away from it. When you listen to those thoughts in your head, when you believe them, then there clearly is a much bigger problem to handle. You’re too hard on yourself. The financial baggage that comes with raising a family can be overbearing for everyone at first, not just you.
8. You don’t know the next step
Unless you’ve endured financial hardship before, knowing what you’re supposed to do next may not come so easy. There are so many methods to choose from for the same objective.
Do I use the debt snowball? Or the debt avalanche? Or pay the minimum payment?
Neither one of these methods are wrong. It’s dependent on your current situation and tolerance towards debt. If paying off debt sooner is ideal then use the debt snowball method. Don’t want to pay any more interest to banks than you need to, try the debt avalanche. Planning on investing your remaining funds to purchase assets, make the minimum payment towards debt, invest the rest, and come back to paying the debt later.
Technically, there is no wrong “step” when you plan for that step to be taken. Throwing hard-earned money around aimlessly creates losers in this finance game. That’s a scary way to play the game. On the other hand, when the next step is obvious, you gain control of your finances again.
9. You need accountability
Plain and simple, this is huge when finances are involved. Procrastination, uncertainty, sense of doubt, anxiety, disorganization come from the lack of accountability. Continuing to make poor financial decisions comes at the cost of unpaid debt, bad credit, working a 9-to-5 you hate, and preparing your family for a poor financial future.
You might be carrying out bad decisions often. Unless someone is looking over your shoulder checking up on you, you will continue taking action on wrong financial choices. Not having to answer to anyone creates a false sense of empowerment. Like we’re allowed to do anything we want without having to answer to anybody. This mentality will send you down a spiral detrimental for you and, more importantly, your family.
10. You lack discipline
Deciding whether to allocate extra funds toward high interest debt or continuing to purchase coffee before work everyday, people contemplate thoughts like this often. If you’re working to accomplish a financial goal, many obstacles spawn out of nowhere. What you have to decide is what is most important to you at that time.
Do you absolutely need that hot brew every morning?
Do you desire to be debt free more than anything?
Presenting questions in such a manner should be obvious which one is more important. But purchasing that two dollar coffee doesn’t seem like much in the moment. That is until it’s compounded over time. Buying that coffee for weeks, or months even, will surely push you further from what you’re actually supposed to do with your money. Having the discipline to wake up earlier and brew your own coffee can help eliminate the need to pass the coffee shop every morning. With discipline you can create the financial gap to do as you please with your money.
Not accomplishing your financial goals based on an unclear decision is one thing. But making the same mistakes repeatedly means you lack accountability. With the right money buddy keeping you accountable, you could be in a much better financial place. Don’t let individual shortcomings stop you from forming a partnership with someone who could propel you to the next milestone on your financial journey.