Many leaders are dissatisfied with their personal life and financial situation. In this blog, leadership coach John M McKee suggests managing each of the 3 key life elements to ensure satisfaction over the long haul.
Most managers are inept when it comes to managing their own cash and personal finances.
And today - more than ever - one needs to be more conscious about how they look after their financial situation, especially their cash flow. Over the years, I've repeatedly witnessed something about managers and leaders : Many of them make ample money but are, technically, bankrupt. They owe more than they own. In many cases, they're entirely dependent on their paychecks to make even their minimum monthly payments. And, often, their situation doesn't improve as they get promotions and raises during their careers - they simply increase their spending such that they still tread in dangerous waters.
At Business Success Coach.net, we use The Four Windows Process in our client coaching. Simply put, it's predicated on the belief that each of us has three key life aspects that combine to determine who we are. They are:Career side - This is the slice of you who goes to work each day to earn money while working at something you've chosen for a job or career. Personal part - This is that side of you that focuses on doing things that replenish you, with your friends and loved ones. Finance manager - This is the aspect of your life focused on how to manage the money you have over the short term and long run.
When properly done, using a plan and ensuring balance between them, these three elements will create a life of great satisfaction. However, if one or more of these life elements is not looked after, the result is an individual who, despite some good successes in her/his career or personal life - is very dissatisfied with his life overall. Very frequently, it is the financial management aspect of his life that has him disappointed and frustrated.Here's a quick quiz to see how you're doing. Give yourself 1 point for each one you answer "yes":
1. Do you know your actual monthly cash burn rate (how much you always spend)?
2. Do you know what your total monthly fixed expenses (the minimum you must spend to live) are?
3. Do you have a savings plan?
4. Are you keeping to the plan you made? (eg: is it growing as planned?)
5. Do you have at least 3 months of cash for an emergency fund?
6. Conservative planners have 6 months. Do you?
7. Do you pay off your credit card balances at least 9 months out of 12?
8. Is your current total debt load (value of all you owe to anyone) lower than it was 12 months ago?
9.. Do you know your net worth (value of all you own less the value of debt including home)?
10. Is your bonus / other financial incentive, "free and clear" without any need to pay bills?
10 - Please call the new Commerce Secretary and offer to run Citibank. We need you out there!
9 - Awesome! You are one of a very few leaders who are doing it right - you'll reap the rewards
8 - Excellent job - stand up and take a bow before the rest of the world!
7 - Nice work - with a little more focus you'll be in a great place
6 - Good - you're doing better than most people, but more effort is needed
5 - Seems like you understand the mechanics but need to be more dedicated
4 - You may want to consider marrying someone for money.
3 - This is not good. You are in dangerous waters. Get involved. Now.
2 - A little better than 1 but you'd better start buckling down. Before it's too late.
1 - This is serious. You need to start getting more involved before the consequences are too great.
Look after all sides of your life. And the bonus is that, as you become better in balancing yourself, you'll end up a better leader as well. Just works out that way.