Once upon a time you decided you wanted to purchase a home...
Your finances are a story, a story that you get to be the author and main character of. You get a choice in the setting, the antagonist, the characters, the adversity and even the outcome. All good stories have these characteristics and how cool that you get to be the author of yours! I understand you may not consider yourself an author, or that this might be a unique approach for you to view your finances, but I believe it is the mindset you need to have if you hope to have a story worth telling. A story worth telling! Have you thought about the story you are telling right now as it relates to your finances. Is the current story about a lack of control and a character that is drowning in quicksand that has attacks coming in every direction leaving the main character weaponless and hopeless? Wow that would be such a sad story, I wonder how it is going to end? Is the main character going to rise up and get out of the quicksand? Whose going to be the rescuer? The lottery, or maybe a huge tax refund or a new job? What happens next? Is this the story line for your finance story?
THE MAIN CHARACTER, YOU
A main character is the focus – the story's about them. That is you. You are the focus of the finance story. You do not get to look around and point a finger at someone else. You do not get to run from this role now that you are an adult. You have to embody this title. So now that we have that squared away, what does the main character have to do to make sure they are a strong lead character for this story?
THE SETTING AND PLOT LINE
Now that you have accepted the title of lead character it is time to outline the setting and the plot line. When you choose your setting be sure it is one you are excited about. Make sure it is one that brings joy to you. The setting is the place you will experience your finances. Your setting will be the place you earn an income. It will also be a place where you expense your income. It will include a lifestyle and spending habits that you will need to be able to support. Your story needs to make sense. There are many reasons for this, but one major reason is for others to be able to understand. A confusing setting that is not consistent to our human nature will leave your audience guessing and ultimately you will lose your credibility. Be sure to be clear with your setting and your plot line. Let me give you two examples:
Jennifer is 30 years old and is so excited to purchase her first home. She has lived in the small town of Bubble Gum for the last 2 years. She moved to Bubble Gum after she graduated with her Masters Degree in Communications. Jennifer has been working ever since her days on the farm feeding the baby kitties with her little sisters bottled milk. She remembers making 1 quarter per week from her father. Jennifer began earning 1099 income while she was studying in both High school and College as a Soccer Coach for the local community center. She started claiming that income on her tax returns each year leading up to her full-time job 2 years ago. While she was working full-time she also continued to coach the soccer team which was paid seasonally. Jennifer was really good at keeping all her documents for both jobs.
Jennifer is 30 years old and is so excited to purchase her first home. Her peers around her are all purchasing and or getting married, so she feels it is a good time to get her first home and stop paying someone else's mortgage in rent. Over the last 4 years Jennifer has been unsure of what she has wanted to do for a career. She studied abroad for 1.5 years, worked at a local coffee shop, babysat for the church part time and even did seasonal work for the local holiday boutique. She has also done some consulting work as a web-designer, but nothing full-time. Jennifer has received a job offer to work full-time as a secretary at a local dentist office. She is thinking about taking it because it is guaranteed 40 hours and will still allow her to do much of the other jobs she is inspired by.
Scenario 1 and 2 are the same person, but completely different settings and plot lines. Scenario 1 is predictable and fairly consistent. Scenario 2 is the opposite. I am not sure what Jennifer is going to do next. It is a bit of a mystery what is going to happen next. Let me be clear, there is not a correct scenario for Jennifer, however if the goal is to have a story that is easy to follow and understand, scenario 1 would be the story to aspire to replicate.
WHY DOES THE STORY MATTER?
Beyond just being the lead character and having a story that is captivating to tell, read and witness. You are also preparing a story that outsiders can understand. There will be times that you do not have the ability to tell your financial story from start to finish. When this happens having a story that is easy to read and understand is critical to allow your setting to tell. Your setting will be tracked with the proper documentation. When the setting is written down and tracked the audience is not left to wonder what happens next.
I encourage you, examine your current role in your financial story. If it is not one you would aspire to witness, read or replicate. I encourage you to start taking baby steps to create a story that is both easy to understand from the audiences view point as well as from a trail of documents. This is your story, make it easy for others to understand!
"What I can preapprove you for is different than what you can afford."