Financial Statement Analysis

Home developers are overbuilding the large and underbuilding the small.

“Reciprocal” levies are due to kick in Aug. 7 — with some exceptions.

Change and control go hand in hand. Some changes fall easily into your scope of control, whereas others remain just outside it. You can’t control the weather no matter how much you wish that sunny January morning was actually sparkling snow. But there are other times when it doesn’t feel like you have control over a situation when you really do — and your personal financial health (and money mindset) is certainly one of them. People often fixate on the money aspects they can’t control, like the market or returns, instead of focusing on what they can control like savings, spending, investing, goal-setting, and more.  When it comes to personal finance, whether or not you feel in control has everything to do with perspective. Your financial perspective is also known as your money mindset. What is a money mindset and do you have the power to change it? Let’s find out.  What’s a Money Mindset? Similar to a money script, a money mindset is the unique attitude, perspective,  and narrative you weave using your thoughts, actions, and beliefs toward money. Your money mindset extends beyond the bounds of your personal life and enters into your general feelings toward finances.  Your money mindset informs the way you manage, save, spend, and invest your money. When you better understand your perspective toward your money, you begin to see where your financial habits come from. A money mindset influences your thoughts and actions, which can have both positive and negative consequences. Someone with a healthy money mindset likely feels confident, secure, knowledgeable, and energized about their financial life. Someone with a negative money mindset might feel anxious, guarded, or uncomfortable about their financial situation. Not sure where you fall? Ask yourself some questions to help shed light on your money mindset:  How does your financial situation make you feel? Are you comfortable talking with your spouse, parents, friends, etc. about money matters? Do you like your financial habits? Are you secure in your financial future? Do you often compare your financial situation to others? Are you confident you can achieve your financial goals? These questions help reveal how you view money. It illustrates how you see your debt, whether you make healthy financial choices, how confident you are in your financial future, and so much more.  How is Your Money Mindset Formed? Your money mindset is formed from your distinct lived experiences. Everyone has a different story and relationship with money because everyone has had different experiences with it throughout their lives. Someone who worked during high school and college might have a different perspective on saving than someone whose first job was well into their 20s.  Along with your personal experiences, your mindset is also formed by how money impacted the people closest to you.  Was money a taboo topic in your house?  Were your parents or loved ones constantly stressed about money?  Did your family prioritize charitable giving?  Was financial literacy a core topic of conversation in your house? All of these past experiences likely influence your attitude and approach toward money today. Someone who grew up in an environment where money was a sore spot might not like managing their finances (or might always worry about having enough money to support themselves and their family). Your attitudes and perspectives are shaped by the people around you, and those closest to you tend to profoundly influence your thoughts and beliefs. As the saying goes, you are who you spend time with,  Why Care About Your Money Mindset? As noted earlier, your money mindset is directly connected to your current financial habits. It affects how you approach money, the way you view and use debt, how you think about your future, and how you view the financial habits of others.  When you know how you approach money, you’ll be more equipped to make intentional decisions that push you in a positive direction. After reflecting on this concept, you may realize you lean on your credit cards too often for purchases you don’t need and that don’t further your goals. You may also discover your propensity for giving comes from a long line of generous role models.  Your money mindset also reveals both your positive and negative traits regarding financial management. This concept isn’t inherently intuitive. It’s critical to spend some time thinking through these questions and being honest with yourself about your attitude toward your money. The best thing about a money mindset? Like perspectives, they can shift. Here’s a few ways you can change your mindset to improve your financial outlook.  5 Steps to Change Your Money Mindset for the Better. Personal finance fluctuates and changes, which always leaves room for improvement. Remember, your money mindset is something you can control. Here are some ways you can evolve and make progress:  1. Believe You are Destined and Deserve Success Too often, a negative mindset leads people to give up on their financial goals. It’s important to approach your money from a place of openness, curiosity, and excitement. Believing that you can reach your goals and find success is the first step. Once you have that foundation, you’ll be able to construct habits that support those beliefs.  This doesn’t mean your entire financial road will be paved with rainbows and sunshine, but it does mean you’ll allow yourself to find success. How can you shift this perspective? Spend some time setting new financial goals. Your goals are the foundation of your financial plan. Once you have your goals, set some key milestones to celebrate as you work toward them.  Starting from a positive headspace will help you make choices that are aligned with those productive thoughts.  2. Picture Your Future Self Sometimes it’s crucial to flip this tough interview question back on yourself. Where do you see yourself in 5, 10, 20, even 30 years? Where have you grown? What have you accomplished? What do you want for your future self? Picturing your future can be a telling exercise as it can

It’s easy to get ahead of yourself. When spotting an issue, you might jump into problem-solving mode without even thinking. Say someone is renovating an old house and decides their first step is to paint the front door. This plan doesn’t make sense and is not smart because it’s not prudent to do the finishing touches without addressing the larger structural issues first. You can apply the same idea to your finances. There may be many changes you want to make with your money. Maybe you want to invest more, or double down on your retirement savings, or ensure next year you get that dream vacation. But before you buy non-refundable airline tickets or dump a hefty chunk into your portfolio, you need to see how these changes fit into your existing plan and how to accommodate them. The starting point? Your goals. Many people struggle with goal setting, so we’re going to walk you through a technique that helps you create more intentional goals today:  SMART goals. What Are SMART Goals? The SMART acronym dominates the business landscape and can be applied to nearly any type of goal you set – from personal to financial and more.  S (specific) M (measurable) A (attainable) R (relevant) T (time-bound) The SMART strategy brings clarity, purpose, vision, and intention into your goal regime. Instead of simply stating a goal, SMART goals ask you to dig deeper and make a plan for achieving it. What do each of these items mean and how do they work in practice? Glad you asked.  1. Specific Specific goals cut through vague notions and provide tangible, concrete conclusions. The more specific the goal, the more actionable it can be. Specific goals clarify your true objective, which enhances the rest of your plan’s construction.  For example, instead of saying you want to invest, say you want to invest at least $50 a month in your brokerage account for the rest of this year.  2. Measurable  Not only should you make your goals specific, you should also have a plan to gauge their success. Measurable goals help you set milestones and track your progress along the way.  If you’re investing at least $50 a month, you will clearly be able to see if you’re following through. A solid way to ensure your savings stay on track is to automate them. That way, you’ll meet your benchmarks and can always add more as needed.  3. Attainable If you’re juggling a full-time job, mortgage bills, raising children, etc. it’s important to set goals you can actually accomplish. Money might be tight right now, especially during the pandemic, so you might not be able to add an extra $200 to your portfolio each month. But you might reasonably be able to do $50!  You want to accomplish the goals you set for yourself, but you can’t do it with an unrealistic vision. Know where you are and set goals that push you but don’t impose on other aspects of your life. 4. Relevant Your goals should have purpose. Goals without purpose lack meaning and don’t get done. If you aren’t setting goals that will expand your life, it’s time to change your process.  Relevant goals also help you prioritize short-term, more annual goals. While it’s always wise to apply consistency to long-term goals, you don’t want to ignore short-term ones.  Perhaps you have a goal to replenish your emergency fund. That’s incredibly relevant and can support you should something unexpected happen. You might commit to funneling $50 into a highly liquid, safe account until the number is where you need it.  5. Time-bound Time-bound goals provide a deadline for your goals. So if you invest $50 a month for 6 months then increase your contributions by another $50 for 6 months (and so on), the time frame helps keep you accountable and encourage progress.  As you can see, all of these ideas play off each other. Even though each is separate, they come together to create a more well-rounded solution.  SMART Examples Let’s compare a traditional goal example and a SMART one. Take a retirement savings goal from an early-career professional:  Example #1: Increase retirement savings. Example #2: Increase 401(k) contributions to 10% and supplement savings by opening an IRA with automating contributions (about 5%) for the rest of the year.  It’s probably easy to see why the second example is the SMART goal. It’s specific by designating which accounts to target and what salary percentage to contribute. It’s measurable by taking advantage of compound savings and automating contributions. It’s attainable because this person received a salary increase and can proportionally allocate their resources. It’s relevant to their retirement savings journey and time-bound for the year they set.   This exercise encourages you to think critically about what you want and the work it takes to achieve it. SMART goals don’t just show you the reward, they also build the path. Should Your Goals Come First? While there are different schools of thought, our team believes your financial goals should come before creating the plan.  Your goals can then chart the course for structuring your finances in a way that’s unique to you. Someone who wants to retire early, for example, will need a different savings plan than someone who wants to wait until they’re 70.  Once you know what you’re working toward, you can take it step-by-step. So before changing your financial plan, check on your goals and ask yourself: Will this change bring you closer to achieving one or more of your goals? Will the action harm or hinder your progress? Do you need to change your plan to best meet your needs? Make Your Goals SMART-er While SMART goals prioritize detail, it doesn’t mean you should ignore the big picture. Your biggest dreams, goals, and aspirations are important and can set the stage for creating more focused SMART goals.  Want to buy a vacation house? That is an amazing  goal, but you must know the actionable steps to reach