The 3 S’s of Personal Finance
Turn on the TV or read the news and you’ll see stories of the millions of Americans struggling financially. As a culture, we remain blind to the devastation of bad financial decisions until we are completely overwhelmed. And, when the economy is shaky, the chance that families will break apart and lives will shatter just increases.
Because finances play such a large role in a person’s well being, coaches must definitely address the subject by bringing a plan with them to the table. I like to use 3 S’s to explain how financial goals should be set and believe other coaches could use this same system with great results. The 3 S’s are: stabilize, standardize and simplify.
Stabilize
In the step of stabilization, families need to quit adding to debt, especially credit card debt. Because debt can easily grow large and create stress fractures in any family unit, stopping the outflow of money that hasn’t even been earned yet is a priority. Another step in the stabilization process is to track cash spending for a month’s time.
Once the spending habits have been stabilized, it’s time to determine how to standardize finances.
Standardize
In the standardization process, the family creates a spending plan by putting essential spending first. This includes the rent or mortgage, utilities and taxes. This is similar to creating a budget, but should be flexible enough to handle emergencies and should include “fun” spending money. Using the tracking done in the stabilization step can help a family create a realistic plan they can live with.
This step also includes building a savings plan. Since savings is the financial rock upon which families need to stand upon, this step needs to be implemented as soon as possible.
Simplify
Once the plan has been built, it’s time for families to simplify their financial choices. Help families understand how important it is to determine the difference between wants and needs. Yes, a family might need a car for transportation, but the choice of a BMW versus a Chevrolet is a want. If the family is really struggling financially, helping make some changes to simplify and downsize might be a great longer term option to get the family back on track.
By implementing the 3S plan, families can begin to make their money work for them – instead of having to spend all their time working for their money.
Linda at Professional-Coaches.com
Related Articles:
- The Top of The Stairs
- What is family coaching about?
- Should You Coach Your Friends and Family?
- Family Coaching
- Lower Your Cost Per Client
Did you enjoy this post? Why not leave a comment below and continue the conversation, or subscribe to my feed and get articles like this delivered automatically to your feed reader.
Comments
No comments yet.
Leave a comment