How is your money management going? The answer may surprise you
The Financial Wheel of Life is a useful tool both for celebrating small victories in your current money management and for setting positive intentions for where you’d like to be.
If I had a nickel every time a person said to me “I’m not good with money” I’d be rich!
Okay, maybe not rich. But I would have a lot of nickels!
When I begin to work with clients in my financial coaching practice I ask them to complete a common coaching assessment tool called the Financial Wheel of Life (shown here):
Financial Wheel of Life Categories
Budgeting Tax Planning
Emergency Savings Short-Term Savings
Retirement Savings Credit/Debt Management
Insurance/Asset Protection Personal Financial Goals
On this worksheet look at each of the 8 financial categories and rank your current level of satisfaction for each one on a scale of 1-10, with 1 signifying “this can’t get any worse!” and 10 signifying “this is wonderful!”
Print a copy of this worksheet and try it for yourself.
How did it go?
As you considered every financial category did you find that you had some satisfaction with one or more of the categories? And to be clear, giving a ranking of 2 or higher reveals that there is at least something going right in that category. Maybe you always file your taxes on time, or that you carry health and auto insurance. These are strengths!
And don’t worry about recording tremendous strengths in all 8 categories. Maybe you don’t actively keep a budget but you are contributing to your emergency fund. Maybe you aren’t saving much (or anything) in your retirement account but you make all of your debt payments on time. Remember that if you are giving a category a rank of higher than a 1 it means there is something positive going on there!
Financial Wheel of Life Step 2
Once you have finished your financial wheel, what’s next?
Go around the wheel again and mark at what level you’d like to strive towards. And no, marking 10’s for all 8 categories is not the point!
Ask yourself “at what number would I like to be and what would that look like?” Maybe now you give your budget a ranking of 3 (you occasionally look at your checking account balance and activity with your bank’s app) and you would like to increase that to a 6 (you collect receipts when you make purchases and look at them once a week, comparing them to your bank's app). That’s progress that you can work towards!
The Financial Wheel of Life is useful during coaching relationships but it is one that you can use on your own as well. Do the first step of the assessment and celebrate where you are (and remember that every ranking above a 1 is a success!). Then do the second step to help you to visualize where you want to go.