The Great Money Reset: How to Take Control of Your Finances
Business analyst Jill Schlesinger offers a framework for making financial resets and ambitious New Year’s resolutions a reality.
Have you ever found yourself daydreaming about leaving your job, starting your own business, or making a big move to your dream city? These aspirations often feel out of reach due to financial constraints. However, according to Jill Schlesinger, a business analyst at CBS News and author of “The Great Money Reset,” it’s possible to take control of your finances and make these dreams a reality. Schlesinger shares a framework, called the “Fabulous Five,” which consists of five steps to help individuals calculate their resources, consider their debt and liabilities, evaluate their housing situation, analyze their spending habits, and assess their obligations to others. By following this framework, individuals can gain a clear understanding of their financial situation and make informed decisions about their future.
Step 1: Calculate Your Resources
Schlesinger emphasizes the importance of calculating all available resources, including assets, income, and investments. Many people overlook certain assets, such as retirement plans or investment properties, when assessing their financial situation. By taking stock of all resources, individuals can better understand their financial capabilities and potential for a reset.
Step 2: Consider Your Debt and Liabilities
In this step, Schlesinger advises individuals to assess their debt and other liabilities, such as mortgages, credit card debt, and education loans. It’s crucial not to become discouraged by the presence of debt. Instead, this step serves as an opportunity to gain a comprehensive understanding of one’s financial obligations and explore potential strategies for managing and reducing debt.
Step 3: Evaluate Your Housing Situation
Whether you own a home or rent, Schlesinger suggests considering the role of housing in your financial reset. For homeowners, selling the house may provide a fresh start and newfound freedom. However, it’s essential to evaluate the emotional and practical implications of such a decision. Renters, on the other hand, should assess the true costs of their current living situation and recognize the potential flexibility that renting offers compared to homeownership.
Step 4: Analyze Your Spending Habits
Understanding your spending habits is crucial for any financial reset. Schlesinger advises individuals to account for their needs and track their expenses. This step is not about adopting a frugal lifestyle but rather gaining clarity on where money is being spent. It allows for a realistic assessment of potential lifestyle changes and the impact they may have on finances.
Step 5: Assess Obligations to Others
Consideration of obligations to others is an often-overlooked aspect of financial resets. Schlesinger encourages individuals to have open and honest conversations about potential obligations to siblings, parents, or other family members. By understanding these obligations, individuals can make informed decisions about their financial future and plan accordingly.
Conclusion: Taking control of your finances and embarking on a financial reset requires careful consideration and planning. By following the “Fabulous Five” framework outlined by Jill Schlesinger, individuals can gain a comprehensive understanding of their financial situation and make informed decisions about their future. Remember, a financial reset is not about sacrificing your dreams but rather finding a balance between your aspirations and your financial reality. With the right mindset and careful planning, you can take control of your finances and make your dreams a reality.