Steven Covey, in his best seller 7 Habits of Highly Effective People writes that the in order to be effective, you must “Be Proactive.” Don’t blame others for your behavior. Instead, focus your time and energy on things you can control.
PREPARE(proactive) VS RESPOND(reactive)
In counseling, the proactive coping approach denotes behaviors in which one will prepare for an event that may or may not happen as opposed to responding to an event that has already happened. In our world of financial coaching, preparation comes in the form of an emergency fund and an annual expense fund. This proactive planning will help minimize chronic stress because you are accumulating resources before an event happens. Therefore, the event is not cataclysmic when it does happen.
We as financial coaches say to tell your money where to go each month using a zero-based cash flow plan that you create BEFORE the month begins.
The longer you remain in the process of budgeting, the more this future-thinking will become natural.
You will develop an “internal locus of control,” according to a recent Association for Financial Counseling Planning Education (AFCPE) journal article. This internal locus of control is defined as the degree to which individuals believe that future outcomes are controlled by their actions in the present. In other words, begin sacrificing present desires for future savings.
It’s not what you know about finances that makes a difference for you financially, it’s HOW you behave.
The StoreHouse Financial Solutions financial coaches are here to help! We can teach you how to create a cash flow plan that will include savings and debt reduction. This will help you be financially proactive. You can begin today!