If completing your year-end financial review were simply about printing statements and reports, adding up debits and credits, and benchmarking whether or not you achieved your stated goals, it’d be pretty straightforward. A few strokes on your keyboard and perhaps a look at your notebook and voila you’re done.
And you would be excited to do this exercise so that you can get a sense of where you currently stand.
However, I am going to go out on the limb here and say that you haven’t done so just yet. Even though, I started writing about the importance of starting to do your year-end review in September. If I’m wrong, good on you. If I’m right, I’m going to bet your resistance has to do less with “free” time and more to do with the Western concept of “identity.”
Yes, that somewhat abstract, umbrella term used to describe (and ascribe) a person’s expression of individuality.
That same concept brands use to connect with your values, beliefs and aspirations so that you buy their products and services over their competitors.
That same concept that influences what you do (or don’t) with your money.
You see, your year-end review doesn’t just give you a snap shot of what’s happened with your money over the course of a year. It reveals your relationship with money.
It reveals a pattern of behavior regarding your choices, habits, and priorities.
It reveals your values and what is important to you – not based solely on your words, but your deeds.
It reveals the tension between the person you are and the one you see yourself as being or becoming.
And, I believe confronting this tension is the unusual reason it’s hard to do what is needed to finish the year strong(er).
Because there is something you’re not ready to see.
What if your numbers aren’t what you planned or hoped for? What if, when you examine your goals, you have more that are unmet than met? Does that mean you are not successful; that you are not a finisher?
What if you look at your numbers and you realize, you played it entirely too safe every single time you made a choice? That you didn’t take any risks because you gave into fear more than you trusted in yourself? That you didn’t exercise as much faith in your talent, skills and relationships as you thought?
These are just some of the questions a financial review can kick up. And not everyone finds the process of answering them liberating. After all, you might not like the real answers, especially if they end up challenging your self-image and sense of self-esteem.
Preparing to Cross the Finish Line
There are two key reasons I get on my high-horse about staying engaged with your money vis-a-vis your year-end financial performance review.
Reason #1 – It gives me another opportunity to shout from the roof-top how what typically makes managing your money time-consuming isn’t the money or administrative part.
In the big picture scheme of things, there are just four things you can do with your money: earn it, save it, invest it and spend it. Sure, it is stressful and overwhelming when the numbers don’t add up the way you need and want. But if you have and follow a system for staying on track to meet your savings goals; invest in accordance with your values; spend less than you earn; and earn what you need to live by design, than the administrative part of your review is fairly straightforward.
Not so uncomplicated is the story you tell yourself (and others) about what you discover during this administrative process. Because this is where your emotions (and perhaps self-judgment) come into play.
Naturally, you end up “managing” the numbers and your reaction to them.
Reason #2 – Data, Data, Data
You should know as much about yourself as brands know about you.
I’ve mentioned this before when I talked about how Target tipped a teenager’s parents that she was pregnant before they knew based solely data analytics. Major retailers and financial institutions collect data about you and your buying behavior and use that to identify and interpret patterns.
Therefore, each time you swipe your debit or credit card or do something online, it’s like leaving a cookie trail.
And, the same data they are using to get to know you and your behavioral patterns is the exact same data you can utilize to finish the year strong.
You may not see this the same as I do, but doing a year-end financial review is largely about amplifying your financial self-awareness. But, this is how you become a better steward of your money and practice more agency over your life. This is how you finish the year financially strong(er). This is how you discover opportunities to grow into the future version of yourself – the person your goals are waiting on you to become.
Yes, doing a year-end financial performance review is administrative. Yes, it requires a bit of crunching of the numbers and looking at your goals. But it is also about deepening your understanding of who you are…and who you want and need to be.
That seems worth a few hours before the holiday season kicks into full-gear, eh?
p.s. Is one of the seats at this month’s Comfort Circle™ dinner yours? The theme is on finishing the year (financially) stronger. Hope you’ll join us on Monday, October 23rd at 6:30pm. To RSVP, click here.