Financial Accountability

Definition: accountability
‘the obligation of an individual to account for its activities, accept responsibility for them and to disclose the results in a transparent manner.’

I am a big believer in setting goals and holding myself accountable to these goals. This holds true in all aspects of life: career, fitness, general wellbeing and just as important, your finances. Over the past couple of years, I have realised how important financial accountability is and how easy it is to neglect. Setting goals isn’t enough – it is important to remain accountable to them.

We often focus on our career goals with the aim of increasing our earning potential – and that is all well and good. However, it is never advisable, no matter how high an earner you are to rely on a monthly pay check. If you want your money to work for you in the long run, it’s important to save, invest and be in good financial health (low debt, high credit score, emergency saving etc.). Financial goals should be set, tracked and monitored in the same way we track and monitor our fitness goals, career goals etc. Also please note financial goals, includes reducing our debts as well as increasing our savings.

“You wanna know what’s more important than throwin’ away money at a strip club?”

The story of OJ – Jay Z, 4:44 album

Now that we have got that out of the way, here are a few things to remember to help you get started on your journey of financial accountability:

Set specific goals

What exactly are your financial goals? When was the last time you set a specific goal with a timeline i.e. I would like to have X amount of money in my savings account by the end of the year; or my investment account to grow by X in 5 years time. If you are not explicit with where you want to be, grab a pen and paper now, and start drafting. Your financial health will not improve by itself.
It is very easy to simply say “I want to be rich in 10 years time”. I know it’s easy, because I do it often! However, no matter how many times we speak it into existence, we still have to work to get there. By putting pen to paper, or as I do typing it up on a spreadsheet, you are taking that first step of responsibility.

Find an accountability partner

Or two, or three! This could be a partner, friend, sister, cousin, parent – someone you trust. You want to be able to be transparent and honest about your current financial health, and where you are aiming to go with it. I have an ‘accounts’ group with a couple of friends specifically for this purpose which has been so useful. The level of honesty and transparency within the group is actually quite scary when I think about it but that is what is needed to keep us truly accountable. Every once in a while, someone in the group hits us with “mandem, what’s good with your credit card” or “family, how’s the savings going? All on target for end of year?”. We are completely honest with status; good and bad, with no judgement and it works. When goals start changing, we all have the right to kick the other person in the backside and work with them to get them back on track. I think it’s so important to be able to talk about your financial goals in a safe and open environment in this way. You learn and lean on each other.

Be realistic and transparent

Whether you decide to keep things to yourself in a journal or talk it out with your accountability partner, be realistic and be transparent. Try not to set yourself up for failure by setting unachievable goals i.e. do not aim to save £10,000 in a year if you know the way your disposable income is set up, you can barely afford to put away £500 a month. I believe your goals should be malleable but do not keep changing them just to suit yourself. The whole point of writing them down is to take responsibility to account for why or why not you have not achieved the goal, and work on it for the future.

“Financial freedom my only hope
F*** living rich and dying broke.”

The story of OJ – Jay Z, 4:44 album

By writing down your realistic goal and regularly feeding back to an accountability partner, you are accepting responsibility for these goals and promising to transparently record the results of your actions as you work towards them. Money is a sensitive topic and many people shy away from having direct conversations about it. However, in order to keep yourself accountable, I would encourage you to be open and honest about your current financial position and where you want to go. What other ways do you keep yourself accountable?

Feel free to let me know on twitter @beingbaroness

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