In an article published by the Harvard Business Review, Joseph Grenny tells that there is a strong correlation between high performing teams and accountability in the work environment. Navy seals hold themselves and their teams to the highest level of expectation by being accountable to the objective of their missions and to their values. The man behind the longest winning streak in sports history (151 consecutive wins), Coach Bob Ladouceur, accomplished his outstanding record by instilling in his players the notion of accountability to their goals. As a married man, I would tell you that a successful relationship relies heavily upon accountability and trust. Simply put, being accountable to someone or to a goal is an indispensable ingredient to success in relationships and in one’s career. From my years of experience working with clients at the bank and from my own journey I can tell you that accountability is certainly a very important ingredient to financial stability as well.
Accountability to financial stability through a budget
‘What you do, tells me everything about you.’ – Jerry Fernandez
Financial stability starts with respect to a budget that drives you towards your goal. Show me your budget and your bank account history and I’ll tell you what you value. In fact, I’ll go a step further and tell you whether you are an accountable (and disciplined) person or not.
When it comes to your finances, accountability does not have to involve another individual or a team. We must learn to be accountable to our goals and dreams by following a budget. First, it is crucial to establish a budget that incorporates your savings and paying off debt goals. There are many options available to you through apps and online tools. I have designed and made available a simple budget tool that anyone can utilize by downloading an excel template. Being accountable to your budget means refraining from making a detour to Starbucks when you have a sudden thirst for a latte. It also means packing up a lunch in the morning before heading out the door to avoid spending too much out. For some, accountability to a budget is remembering to pay the bills on time. This budget is your guide, a visual representation of your current financial position in relation to the ultimate weekly or monthly goal. It’s similar to the principle of a GPS. When we enter a destination into a GPS, it doesn’t helps us to ignore its instructions. In parallel, we may never reach financial stability when we are not accountable to a budget.
Accountability to financial stability through a partnership
‘A body of men holding themselves accountable to nobody ought not to be trusted by anybody.’ – Thomas Paine
For some people, motivation is external. If that’s the case for you, use it to your advantage. Use your environment or your sphere of influence as a source of motivation to help you stay disciplined and on track towards your financial objectives. When Heather and I got engaged and were moving closer to our wedding day, we decided to combine our finances. We saved, payed off debt and budgeted together. We had savings and credit goals that we wanted and truthfully, we had to achieve them. We worked together to make it happen. Many couples are against the idea of combining their money. I cannot convince you to do so but here is what it’s done for Heather and I. Only three years after being married, we’ve paid off all of our debt except for a new car (less than a $300 monthly payment) and less than $10,000 in student loans. Moreover, we have saved enough money to put a 10% down payment towards a home in the suburbs of Washington D.C. I believe the simple fact that we have unified our finances and set goals together raised the level of responsibility and accountability in our daily financial decisions. I did not want to let her down and the feeling was reciprocal.
If you are not married, you don’t have to wait to tie the knot to apply this principle in your life. You can make it a game or a challenge and have fun with it. Whether it’s a parent, a significant other, a close friend, a co-worker or a roommate, designate someone whom you trust to keep you accountable to your financial goals. For example, partner with your roommate(s) and keep each other from spending too much eating out by taking turns going grocery shopping. If you have a willing and supportive parent (or friend), you could schedule a weekly conversation to evaluate each other’s spending habits during the week. How strictly did you follow your budget? Whoever drifted the most may have to buy dinner to the other at the end of the month. The point is make it fun, challenging and even competitive. Be accountable to each other and you will soon find yourself in a very stable financial state.
‘Accountability separates the wishers in life from the action-takers that care enough about their future to account for their daily actions’. John Di Lemme couldn’t have said it any more accurately. Do you care about your future and your finances? You wouldn’t be reading this article if you didn’t. Nonetheless, simply wishing for a larger savings account does not make it happen magically. Inject a dose of accountability in your plans and be on your way to financial stability.
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Money-Smart Millennials 