There’s a new mindset in Washington, D.C.  It’s called change.

Change is one of President Barack Obama’s favorite words.   Mine, too.  I especially like what the word represents when it comes to money.  It has several meanings for me:  as in loose change adds up to folding money and as – now is the time to change or at least reassess our relationship with our personal money.  Let’s talk about changing the money relationship.

Set aside a dedicated hour to take a serious look at your money:  where it is, how much is there (rather than focusing on how much you’ve lost), what’s the return on your investment, when should you re-allocate or re-distribute your resources and what’s your next money move. 

When you do this reassessment, let your primary goal be to look for ways to increase your comfort level.  That’s it.  Finding your comfort level is the first step in regaining confidence as we all try to recover from – while still being in the midst of – the economic crisis here at home.

Next – it might feel counterintuitive since there are still difficult economic times ahead but if you have a little money set aside – now’s the time to buy stock.  There are many good companies available at low prices.  So give yourself permission -  find the confidence – to invest in the stock market again.  Here’s how:

• Develop a stock investment philosophy – how you will invest, in what, how much and when.
• Approach investing with a formal plan so that you can make informed decisions.
• Monitor stock investments so you understand the fundamentals of the stocks in which you invest.
• You’ll tend to hold chosen stock during market volatility if you believe in the company for good reasons.
• Remind yourself why  you’re investing and be sure to write down the reasons.
• Write down the long-term returns and the short-term losses you expect because that will keep you focused on the long-term plan.  
• Consider selling stocks if you have short-term cash needs.

For those – and there are so many – who have been living paycheck-to-paycheck or have voluntarily created a more frugal lifestyle – let your goal also be looking for ways to increase your comfort level, too.  Give yourself a spending plan (a budget) based on small, achieveable goals and objectives such as saving a certain amount of money by a certain date; paying off a credit card balance and not charging what you can’t afford to pay off in full each month; or increasing your 401(k) contribution.  Each time you reach one of those doable, set goals – take a moment and notice what you have done and how that decision shored up your financial vulnerability a little bit more. 

Good management of one’s personal money is the first step toward self-reliance.  To me, the more self-reliant we are, the greater our comfort level.  The greater our comfort level, the better we are able to make good money decisions.  It’s your money, so take it personally.  Make this year of change the year you commit to taking personal control of becoming better informed and better educated about managing your money.

There is opportunity in the midst of this continuing economic crisis.  The opportunity is to put in place a new culture that’s committed to managing our past out-of-control consumption.  So create a new money vision for yourself.  Write it down and tell someone your plan so you feel committed.  Take small, daily steps regarding managing your personal money but do them with a sense of urgency.  Stay clear about what you can comfortably afford to spend because that’s the best way to stay out of debt and control overspending – which can happen even when money is tight.

You really can start building a solid financial life.  That solid foundation will not only help you weather the continuing economic storm but will help you develop a personal money agenda for the future that’s based on facts and conducted with discipline rather than fear.

There’s your New Year – New Money Mindset.  If you want more daily money tips that will help you spend, save, manage and invest, go to Valuable Money Tips with Valerie Coleman Morris at http://www.napw.com/valuable_money.cfm.

Here’s to your health and wealth.

TAGS: achieving financial goals, building a financial foundation, investing in the stock market, portfolio reassessment, Relationship with money, self-reliance, spending plan/budget