How are you doing with your money goals? Are you making progress? It’s hard to know. Answer these seven questions to complete a money self-evaluation!
The power of a self-evaluations
Before we dive in, let’s talk about the power of self-evaluations. No one likes company annual reviews or criticism. Why put yourself through the torture of asking tough questions?
Infamous basketball coach, John Wooden said, “Without proper self-evaluation, failure is inevitable.”
When you evaluate your progress with money you can:
- Reflect if you’re on track to reach your money goals
- Course-correct when you’ve experienced obstacles
- Be self-aware of your strengths and weaknesses
- Find out what motivates you and makes you tick
- Stay accountable
A self-evaluation will allow you to get what you want in your financial life.
For example, if you want to quit your job to RV full-time across America, then you need to evaluate how you can make this a reality. Here’s How I Decided to Live in an RV Full-Time and RV Life: Expectations Versus Reality.
Use my FREE downloadable guide to complete your evaluation.
Money Self-Evaluation (7 Questions You NEED to Ask Yourself!)
This money self-evaluation assumes you have clearly defined money goals. If you haven’t set money goals yet, then check out these resources:
1. How likely are you to reach your money goals?
Once you’ve set money goals, the first question to ask yourself is how likely are you to achieve the goal? Give yourself a score on a scale of 1-10, with one as not likely and 10 is very likely. Allow yourself to honestly reflect on this.
Here’s signs you aren’t likely to reach your money goals:
- You’ve had the same goal for years and aren’t closer to achieving the outcome
- The goal isn’t broken down into small attainable task you’re doing daily, weekly, etc.
- There’s no deadline or urgency
- The goal isn’t clearly defined or written down
- You aren’t tracking your progress for debt pay off, down payment savings, retiring early, etc.
2. What’s stressful to you about money?
Next evaluate the areas you experience stress with money. Millennials are reporting the highest levels of stress, anxiety, and depression according to Psychology Today.
Common money stressors:
- High debt load
- Living paycheck-to-paycheck
- Lack of savings for emergencies
- Feel like homeownership is out of reach
- Never have money for what you value, like travel
Writing out what exactly you’re stressed about will help you practice mindfulness (or awareness) with money.
3. What’s held you back in the past from achieving your money goals?
This is a difficult question to answer, but when you evaluate what’s held you back, you’ll get clarity.
Here’s examples of money roadblocks:
- Consumed with analysis paralysis (you have no plan, direction, or starting point)
- Expenses are high in comparison to income
- Life circumstance like health issues, unemployment, etc. throw you off
- No financial education- you don’t know what you don’t know about money
4. What can you do to overcome these obstacles?
After you’ve determined what’s held you back, brainstorm on how to overcome these obstacles. Albert Einstein said, “The definition of insanity is doing the same thing over and over and expecting different results.”
To get new results with money, chances are you need to try something new.
Examples of how to overcome obstacles:
- Overcome analysis paralysis by starting a plan to pay off debt and invest
- If your expenses are high in comparison to income cut expenses or increase your income with a side hustle
- When life circumstance like health issues, unemployment, etc. throw you off prioritize saving 3-12 months of expenses for an emergency fund
- If you don’t have a financial education, then take a class! You’re invited to my FREE workshop, “The Ultimate Guide to Managing Money.” Get the details and register here.
5. Why is managing money and financial education important to you?
The next question is to define your why with money. This is your reason and purpose behind your goals. Managing money isn’t all numbers, it’s behavioral and psychological!
Reaching any goal take sacrifices and it isn’t easy. When you determine your why, you give meaning to take on any challenges.
Common reasons why managing money and financial education is important, you want to:
- Adult: buy a home, start a family, pay for a wedding, etc.
- Gain a sense of safety, security, and freedom
- Reduce stress, depression, and anxiety
- Travel and experience life to the fullest
6. What would you like your financial life to look like?
Answer this question by imagining what you want. Imagination is a powerful tool. Before a home is built, an architect will imagine what it looks like. Or a civil engineer will see in their mind how to construct a highway.
Imagine what your life would look like if you had no student loans, car loans, or credit card debt. All the money going to debt would be yours to keep for vacations, a new wardrobe, or for your future.
7. What would you buy if money was no object?
The last question in the money self-evaluation is for fun! Managing money isn’t about self-deprecation. When you have a plan with money you can do more of the things you love.
For example, if you could spend on whatever you wanted, you’d take an international trip every year. Personal finance blogger, Paula Pant said, “You can afford anything… but not everything.”
This mantra means if travel’s important to you, you can align your spending with this value. You can afford a trip, but chances are you can’t afford everything. It’d be too expensive to pay for a trip, new car, downtown apartment, AND eating out every day.
Completing a money self-evaluation is challenging, but you’ll gain insight to reach your money goals.
