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Earning
Do you earn enough for your skills? Many of my clients who use career coaching just looking for a new job find that their salary has been lower than the current rates on the market for some time. It is rare for an employer to raise our salary on its own if we have not explicitly asked him to do so before... Can you negotiate a higher rate if your work has actually become worth more? Of course, salary reports or statistics will not give us a complete answer on how much we should earn, because our earnings are due not only to knowledge and skills, but also to our approach to work and efficiency, personality traits, ability to present oneself during the recruitment process or the situation on the local labor market. To a certain extent, they also depend simply on luck.
At least once a year, ask yourself if there is an opportunity for you to earn more, given the skills and other assets you already have. Think about whether you can do something that will help you earn even more or with less effort. Is there another way in which you can use the competencies and resources you have to multiply your wealth? Are you able to acquire new skills that will increase your position in the eyes of employers? Can you manage your assets more effectively? Are you ready to take a risk and change jobs or disguise yourself to earn better money? Is your approach to work and upskilling, as well as your level of motivation and commitment to work adequate? In these areas, it is worth consulting with a career coach or career counselor to make the most of your potential and opportunities on the job market.
Issuing
Are you spending money wisely and appropriate to your financial situation? Or do you live above the state or spend everything you earn and constantly live in fear? Some of my clients in financial coaching have huge problems maintaining discipline and refraining from compulsive shopping or buying things they don't really need at all and have simply succumbed to a momentary whim instead of pondering the legitimacy of the expense. Many people are very susceptible to “buy — you deserve it!” ads. and then it turns out that they spent a lot more than they intended. Each purchase means less money for other expenses or less money for saving or investing.
Even if you make great money and feel like you don't have to cut back on spending, it's a good idea to learn how to manage money wisely and make purchasing decisions. It is also worth teaching this skill to children, as it is a necessary factor to achieve financial balance and avoid many stresses and even falling into debt.
Investing
Many people think that they have too little earnings to think about investing. True, if we have small financial resources, then we will not buy an apartment for rent, a bar of gold or a large package of shares. However, investing also means spending money to acquire skills that will help you earn better, buy equipment that will make your work easier or decide where to best place your funds — even if they are not large amounts. Of course, it will also be a trap when someone spends too much on investments, neglecting the important needs of his or her loved ones. Moderation and common sense are always essential.
saving
Contrary to appearances, the level of savings you have does not depend only on the amount of earnings, although of course it is much easier to put aside money when you have an income of 20,000 PLN per month than when you earn only 3000 PLN per month. However, there are many people who have earned huge amounts of money for decades, and then complained in the media that they have nothing to live for, for example, some stars of cinema or stage. The fact is that — depending on the psychological profile of financial identity and our habits, beliefs and values — for some people saving will come naturally, while others will simply have to learn it, alone or with the help of a professional. Already in children of several years we can notice that some know how to put away the money received, while others spend everything at once... And can you save? Is the more you earn, the more you spend, so you always live under stress at the end of the month? Or maybe, despite the good earnings, you have not built a financial cushion?
Borrowing money
Hundreds of thousands of Poles fell into debt as a result of taking loans, both in banks and in parabank institutions or borrowed from their families. Many people live “from debit to debit.” Banks outdo each other in encouraging us to go into debt, and many stores - especially home appliances and electronics - urge us to buy in installments of 0%. Is it easy to get you to spend more than you earn? Do you willingly succumb to advertising and buy on credit? IB maybe you belong to that group that avoids taking out a loan, even when it is necessary to improve the quality of life (eg buying a larger apartment) or for the development of a business (eg investment loan)?
Risk management
Life is full of risks, and many potential dangers are completely beyond our control. However, some of them we have a certain influence, for example when we significantly exceed the permissible speed when driving a car. Some risks can be foreseen - at least to some extent - and taken into account when making decisions (e.g. the exchange rate risk of a foreign currency loan). It is impossible to prevent all unwanted situations. However, in some cases, we can protect ourselves in the event of a given risk by purchasing appropriate life or property insurance or simply avoiding certain situations, such as building a house too close to the river. How do you manage risk in your personal and professional life? When making serious financial decisions, such as taking a loan for an apartment, starting your own business or granting a loan to someone, do you analyze what type of risk it involves and whether it is possible to reduce the occurrence of this risk or at least minimize its negative consequences for you and your loved ones?
Retirement plan
It is not necessary to be an expert on the pension system to know that if we want to protect ourselves financially in old age, we cannot rely on what we must necessarily deposit in the Social Insurance Institution... Only a small percentage of Poles have enough money to put aside for their own retirement without any sacrifices. Most of us, in order to put aside funds for a financial cushion or retirement, have to give up the part of consumption that we feel like doing right now. However, experts emphasize that a huge role in protecting oneself in old age is played by the habit of constantly putting aside even small amounts, but consistently, for decades. What is your idea of life when you are no longer able to work? Are you thinking about what you will make a living from in retirement? Even if you still have 20 - 30 years left until retirement, it is worth starting to think about it now. Passive income is one of the solutions that allow you to earn income even when you no longer do any work.
Tax planning
I don't think anyone likes to pay “the state” more money than they absolutely have to... Therefore, it is worth consulting with an expert who will advise what are the most favorable in our case ways of accounting with the tax office. This is not only important for people running their own businesses. A good tax advisor is really worth its weight in gold... With the right tax optimization, we can save a lot of money. The New Deal has left consulting firms under even greater siege than before. So plan your visit to an experienced tax law expert in advance.
Transfer of property
That is, planning what will happen to the property after you die. This is the area that generates the most conflicts in families. It leads to quarrels, mutual grievances and even the breaking of family ties or dragging on for years after the courts. In addition, the rules of inheritance law can be quite complicated, especially when there are many heirs left and they cannot reach an agreement on the division of the inheritance. Of course, laws often do not take into account the specific situation in a given family, for example, the fact that one of the children has spent much more time or money caring for an aging parent than the other children, but in the case of a legal inheritance he will not receive more, although it has incurred greater costs. If we want to save our loved ones from disputes and frustrations, it is worth taking the time to consult a specialist in inheritance law and draw up a will, even if we still have statistically several decades of life ahead of us.
Think, how do you do in each of the 9 areas of financial management. Which ones do you feel best about and which ones do you neglect? What areas generate the most problems for you? What does it come from? What actions can you implement to gradually improve functioning in each of the areas? In financial coaching, I work with clients on such issues, among others.
