Odds are, the company you work for has a number of policies and procedures for employees. One of those documents might be its mission statement. Seems as though every kind of business model has its own version of an objectives or mission statement. But have you considered assembling one for your own personal finances? Before you balk at the idea, there are several reasons why this is a sound financial decision – and definitely a decision many financial experts encourage consumers to consider.
Your Mission Statement
A financial mission statement will help you understand not only where you are, but it can serve as concrete proof that you’re working toward particular goals. It’s a crystal clear method that works. You also have a visual reminder of what lies ahead if you stick to your plan (even if it does grow and evolve – which isn’t a bad thing).
So what should your financial mission statement do? Ideally, it will provide a snapshot into what your priorities are and then, will serve as a measuring guide to help you not repeat past mistakes, but focus on those stronger financial habits you already possess. Just like a more formal mission statement that graces the halls of companies around the world, your mission statement should provide a clear game plan, including which actions you should be taking in different situations.
First up, you’ll want to be sure every bit of your financial details are front and center as you go about writing your statement. Of course, you’re not going to list it or include those specific creditor details, but when you have it in front of you, you’ll be able to see that one of your bigger goals is to pay off credit card debt. Student loans, your mortgage and other financial accounts should be on your mind as you set about prioritizing. Be sure you use clear and simple language so that every member of your family – even your little ones – can feel as though they’re a part of the financial success you’re working towards.
In fact, you might even consider writing a new budget or updating your current budget so that you really are aware of what’s going on with your money. There are literally thousands of financial tools that cost nothing, but that can be great tools that will empower you and make you feel as though you’ve got those bases covered. Remember, though, those tools are only as good as your commitment to keeping them current. If you are struggling financially, your missions statement can include a commitment to seeking help if it becomes too overwhelming. This lets your family know that no matter what, there are always going to be solutions – and ones that you and the family will work to incorporate.
Care about giving back? This is a great way to include the kids, too, as you explore various ways of giving back via charitable acts. It could be your church tithes or an annual financial gift to the local homeless shelter that your son or daughter mentions. Get them actively involved. They’re going to be more prone to paying attention if they feel as though they’re part of the solution. Include that in your mission statement as well. For instance, consider adding a sentence such as:
Our family understands the kindness and importance of charity. We will work together so that we always are reminded of the simple things in life, such as “good works”. You might also even make mention of the democracy that is your family with a notation that your charitable recipients are decided by input from everyone.
Also, you’ll want to include the importance of sound financial decisions and the financial education that can help shape your children as they eventually grow up and begin their own lives. Try this:
We strive to educate all of our family members. We are committed to teaching our children how credit card debt becomes overwhelming as well as the importance of putting a retirement plan in place while they’re still young.
And speaking of education, you may wish to consider adding the expectations of your children to earn their college degree. Include that in your plans and reiterate the importance of how an education can mean easier financial adult lives. Encourage your kids to ask questions too, especially in these areas that will directly affect them at some point.
Be sure to provide succinct and definitive verbiage on what your own savings game plan encompasses. You’d be amazed at how many write their statement and review it again a year later only to realize they have no idea what they were even referring to as it was being authored. Consider this:
We are committed to our savings accounts and we will work to put aside money each month after we have met our monthly financial obligations.
Don’t forget to include your views on money itself:
We will never lose sight of the fact that money can’t buy happiness, but when handled properly, it can certainly provide peace of mind and allow for many opportunities over the years.
Don’t forget to make mention of long term objectives:
It’s our commitment to have credit card debt paid in full and then we will remain committed to never allow credit card balances spill over into a new billy cycle.
Remember, it’s certainly a powerful motivator, but just as importantly, it memorializes this particular time in your family’s life. Imagine finding a simple sheet of paper, brown with age, in a small box in the attic forty years from now. That takes hindsight to an entirely new level.
Once you have your mission statement completed, don’t assume it’s written in stone. Life changes – our incomes change, employers change, the size of our family changes and even credit cards and banks change. Approach it as though it’s a living, breathing document that will transition as your family evolves.
By including the little ones, you’re opening up their minds to how finances work. If they’re old enough – and only you know that – consider exploring your Visa statement. Explain to them what the balance is, where the APR is and what the rate means for that balance. Review the itemized transactions and explain to them it’s one way to glance at your month’s spending so that you can identify areas that could be eliminated. The same goes for your bank accounts. Show your daughter your check register and why it’s so important to keep it balanced. Show your son your online 401(k) specifications and let him know that the balance will continue to grow as Mom and Dad move closer to retirement.
Finally, to go along with your mission statement, and if your children are teens, why not allow them to have a prepaid debit card? This is a physical teaching tool and one with proper guidance can mean they have a strong sense of responsibility and proper debt management.
So what do you think? Does a financial mission statement sound like something that would bode well with your family? Do you already have one? Share with us your stories and let us know how well yours is working, too. You can join the Facebook conversation, tweet your thoughts or comment below in our comments section.
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