I thought that it would be fun to come up with and write about the 4 Cs of family finance as seen by the folks at Family Finance Works (primarily me).
These are areas that I focus on to keep our finances in line and I hope that they can serve as some guidelines for you. I’m sure that you can come up with some more and I did too but these are the four that I find to be most effective when trying to develop a good financial mindset.
These are in no particular order of significance. I see them as equally important.
- Contentment - Is the grass really greener on the other side? Being happy with where you are (geographically and mentally) is a key component to success. Being content doesn't mean that you'll never have the things that you desire. Being content does mean that you can be happy no matter the circumstances. You can be happy right now if you choose to be. If you can't then you won't be happy once you do get out of debt or are able to pay cash for your next vehicle. You certainly won't be happy if you're depending on some shiny object (house, car, phone, etc) along with more debt to make you happy. I have to remember these things for myself as well. We're in this together. It can be tough to resist but find the right balance and be sure to make progress.
- Communication - In a family, communication of intent and agreement on your goals is crucial. You have to sit down and create goals together first though. I know that it's tough with kids to get the time. When you have the time, I encourage you to have fun but also make time for getting your financial goals on paper and regularly discussing them. A goal-setting conversation can be a fun one if you want it to be! Keep your eye on the outcome instead of the work to get there.
- Commitment - Sticking to the goals over months and years is important. The entire family, depending on the age of your kids, should be committed to the overall goals of the family. Once your kids understand the importance of building wealth then they should be okay to join the conversation but use your discretion on the timing.
- Control - Yes, I know that you may frown at this one. The word control does sound kind of negative but I think that you have to control your money or it will control you. Of course, doing a budget is the best way to control spending. Tracking your spending regularly to ensure alignment with the budget is a must, especially early on as your getting a grip on things.
What are your Cs (or pick your favorite letter)?
I find that it’s easier to remember ideas and keep them in the forefront of my mind when you attach them to an acronym or list of letters. I hope that this brief list helps you out.
Here’s an exercise that will help you to put the 4 Cs into play quickly. Write down each area and list 2 or 3 things within each one where you can improve.
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