Get real about what money is coming in and what money is going out.
A lot of people know how much money they’re bringing home but aren’t as clear about what they’re spending.
Joseph Edmondson, CFP, and a financial professional at Equitable Advisors, says he asks new clients about their net salaries first. “Then I say, ‘What do you think you’re spending monthly?’
“I find a lot of times is that there’s usually a gap between what individuals think they’re spending and what the actual number might look like.”
Edmondson says that clarity comes from assigning actual dollars to the goals.
“In a lot of cases, that’s because there is not a real goal around money,” he says. “So I try to help people to change that thought process. Pay yourself first, understand what your expenses are, track those expenses, and put yourself in a position to have success over both the short term and the long term.”