It's okay to like nice things....

I have a confession... I'm a financial advisor and I still buy nice things. 

Somewhere along the line, we came to believe that the "managing your finances well" awards revolve around spending the least amount of money. Yes, spending less than you make is essential but it doesn't surpass what really makes someone good with money-- intentional, values-aligned spending and investing decisions do. 

Firstly, it's important that we remember most of the discourse around women, and women of color managing money is based on stereotypes. The stereotypes all center around women being irresponsible with money(see the 1990s welfare queen discourse or Starbucks habit-type posts on social media).

These stereotypes have seeped into our collective consciousness to mean we also think we are bad at managing money and can't be trusted.

We can't have a nuanced financial plan that balances necessities with luxury!

We would just go hog wild and spend everything!

The way many personal finance folks discuss women cutting spending to the bare bone makes me feel as if there's some deeper pleasure they get in seeing folks be miserly, living miserably, and looking dusty. 

To me, the true assessment of managing money well hinges on how well the person spends and invests according to their personal values; and whether they know how much they need to save and invest/per month to hit their financial goals. What does this process look like in practice? 

1. Do a values exercise- What's a priority for you? What brings you joy? How do you want to say you've lived your life at the end of it? Those clues are the foundation of a solid financial plan. 

I personally like James Clear's values exercise.

2. Review spending or do a time study-  I know, this probably gives you the sweats if you're anything like most people. You're likely fearing your own judgment if you actually look at how you've been spending your time and money. But how will you ever know you're in alignment if you don't do it?

If you say health is important but you don't spend time doing physical activity or spend money on your physical health, then is it really? Honesty without judgment is important. It's just data, and with data, we can make the right decisions for OUR finances. Review 3-6 months of credit card/bank statements and/or do a 2-week time study to see where your money and time are going. I promise it will be eye-opening. 

3. Run your numbers- This is crucial. What's it going to take to buy your dream home? Travel 2 months a year? Start a business? Pay off your mom's mortgage? Retire at 55?

Having concrete numbers is the first step in creating a prioritization plan and your personal financial plan. 

4. Check the math- Now that you know what the goal is and what it will cost it's time to calculate what you need to contribute every month for those goals. 

For example, let's say you know you'll need $50,000 in 3 years for a home down payment, you will need to contribute $1,388.89/month into a savings account for that purpose. 

For longer-term goals that require investing(such as retirement), you'll need online calculators to tell you how much you'll need to contribute. I personally like this calculator for retirement and this one for education funding. 

5. Revisit once a year- Priorities and values change over time. What you wanted 5 years ago might not be what you want now. By revisiting your values and goals every year, you ensure you're saving and investing in the right things. 

Once you go through this entire process, I want you to give yourself permission to spend money... GUILT FREE. So long as the money you are spending is in alignment with your values and priorities, there is absolutely nothing wrong with that!