Episode 113 - Seven Questions for a Financial Reset(original date 1/8/2024)

As we begin a new year, it’s the perfect time to pause and take an honest look at our finances. In this episode of Catholic Money Talk, Paul Scarfone shares seven practical questions to help you assess last year’s wins and challenges, identify priorities, and create a clear plan for the year ahead.

This episode focuses not just on numbers, but on the behaviors and habits that drive real financial progress. Paul also introduces a Financial Wellness Checklist to help you evaluate your overall financial health—from budgeting and debt, to insurance, legal planning, and your relationship with money.

Whether you’re married or single, Catholic or simply seeking practical financial wisdom, this episode will help you start the year with clarity, intention, and a stewardship mindset—always keeping our ultimate goal in mind.

Transcript

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Paul, Welcome to Catholic money talk, where we talk about all things money and finance, and we try to do it through a lens of being Catholic, where our ultimate goal is to one day be in Heaven with the Lord. I am your host. Paul Scarfone, thank you for being here today. Happy New Year. Welcome to 2024 I took last week off from recording an episode just to spend time with family and friends celebrating the birth of our Lord. But today, today we'll get back to financial talk and other business. But before we do that, let's start with a prayer in the name of the Father and of the Son and of the Holy Spirit. Amen, Heavenly Father, we thank you for this day, we ask You for all the grace and wisdom that we need to face the challenges or circumstances that we find ourselves in. We know that you love us and that you have a great plan for us, allow us to yield to your Holy Spirit. We ask all this in Jesus name, amen, in the name of the Father and of the Son and of the Holy Spirit, Amen. So this is my second year. We're starting our second year with Catholic money talk, and I hope that the help and support that you've received as you tackle life's financial ups and downs, while trying to constantly keep the perspective of our ultimate goal right to one day be in Heaven with the Lord. So I'm happy you've been able to join us, and hopefully we've been able to work on our finances here and better, develop a sense for how do we know love and serve God with our finances, and how do we use our Catholic faith as a lens to help us make prayerful and financial decisions? As the calendar turns and we start a new year, it's a great time to assess our financial situation and determine how we did this past year, and what do we want to accomplish in this next year, and then additionally, what behaviors are needed to ensure that we can move forward towards Our goals. And this conversation, it's not exclusively for Catholics or Christians. Some of this is just very practical wisdom that everyone, regardless of where your faith might be, should should look at and do. This is just helpful, very practical information, and my hope is it's going to help you achieve just that right, assessing last year, looking at our current situation, determining a plan for this coming year, and what behaviors we want to implement. So here we go. Here are seven questions that will help you, and if you're married, you and your spouse assess and plan out this next year as it relates to all things financial. The first three questions, take a look at last year. Question number one, where did we win with money this past year? So what financial goals did we achieve? Maybe it was paying off debt. Maybe it was saving money towards a goal, like a fully funded emergency fund or maybe a larger purchase. Maybe we hit our investment goals for our long term savings or retirement. Maybe we were able to finally implement budgeting and working together as a team, did we start to contribute to a retirement account? Or perhaps we purchased our first home? Maybe, maybe we hired a financial coach and started moving our finances in the right direction. These successes, and they don't all need to be mathematical goals. They can be behaviors that we successfully either implemented or improved. But whatever the successes are, write them down and celebrate them. I know you have at least one, if you're here right, maybe that one was just starting the behavior of listening to a helpful podcast about finances. So that's the first question. Where did we win with money this year? Question two, where did we fall short? Were there savings goals we missed? Were there unplanned purchases or new debt added to our financial picture, what areas did we fail to plan for? Do we have an emergency that completely depleted our emergency fund? Or maybe it was a credit card that got ran up? Maybe it's behavioral did we step away from goal setting or budgeting? And tracking expenses. Was there a book or a class that we wanted to learn from, and we just never bought it? Whatever it is, write it down because we want to plan to not find ourselves here again? So that was question two. Where do we fall short question three, and it's kind of a follow up to question two, are there any goals or areas we fell short in that need to become a priority for this next year? So for instance, if we depleted our emergency fund, do we need to prioritize building that back up? If we went into debt from an unplanned purchase, do we need to create a plan to pay that debt off if we had some impact, or our financial plan for the year and we we missed some goals, we need to determine if we're going to just reset them, or if we want to actually try to catch up. I'll give a little personal example here. One of our personal financial goals was to pay off a certain amount of our home mortgage principal right in 2023 now, during 2023 I've probably shared a little bit about this, but our income, we had a significant drop. We had to maneuver some things around, change some of our own business strategies just to handle the challenge, and we made a decision mid year to alter our plan for paying down as much of the mortgage as we had said we would. So as I look at where we are today from where we plan to be, we missed that goal just earlier today, actually the day I'm recording this, Taryn and I, we sat and we were trying to decide, what do we need to do? Are we going to limit some other expenses and change some of our priorities to catch up on the plan to pay off the mortgage, or are we okay coming in under plan for this past year, and how does that impact our plan going forward? And if you don't know the answer for your situation just yet, that is totally okay. Tara and I, we have to have another conversation about this. But that is why we write these down, because we don't want to forget them and ask the next question, we're going to have a much broader view of all the things that we hope to achieve this year. So that was question number three, are there any goals or areas we fell short in that need to become a priority for this year? Question four, are there any major financial items or transactions that are newly approaching for this year? So another way to ask that is, are there new circumstances, maybe a goal or some need that's emerging that we should make a priority. What could those be? Well, maybe we're expecting a job change or promotion, or maybe possibly it's a home purchase or a move. Are we graduating from college and looking to start our first job? Are we moving towards marriage and want to save up for a ring or a wedding. Did we just find out we're having a baby? Are we trying to retire this year? Do we have a child starting college? That's one for us. We have a child starting college? Are we approaching a major purchase, like a car, for instance? So making sure we are identifying larger items within our financial picture, it's so important. We need to see where they all fit together and how they all align as far as priorities, and we must ensure we have a plan to tackle these things and using the answers that we generated from questions three and four. That's the start. It's a well brainstormed list of potential goals for this year. So we want to use this list as well as the process for goal setting, and we can begin to hammer out a plan for our 2024, financial goals. I mentioned goal setting if you listen to last year's episodes, episodes number six and seven. That's my goal setting, parts one and two. In those two episodes, I discussed the five basic steps to developing goals. Step one, brainstorm items we can take action on right and here questions three and four. Kind of did that for us. Step two, identify realistic and specific goals. Step three, break down goals into smaller steps. Step four, identify obstacles and plan to overcome them. Step five, set a time frame for achieving goals and inspecting on your progress. So go ahead and listen to episode six and seven from last year to completely walk through these five steps for goal setting. And I recommend, as you're doing this, you try to have at least one goal for each of these areas, income, giving, saving and. Spending. They don't need to be big goals, but making sure we have at least one goal in each of these four areas, it kind of makes for a balanced financial plan, kind of like a balanced diet, right? Those are the four aspects of our financial life, income, giving, saving and spending. So we should have at least one goal in each one of those. So moving on to our questions. We did the first four. The next question is question number five, what behaviors do we need to implement, build on, or improve in in order to have more success? There can be a wide range of possible behaviors, some being free, and others might cost money. If you don't have a written plan, a written budget or tracking of spending, you need to start there. Maybe you need to invest in software or other tools to assist you in implementing those behaviors. Maybe there's a free podcast, an E course or a book that will help you develop your skills. Maybe the behavior is just regularly scheduling meeting with your spouse to discuss finances if you're single. Maybe it's finding and meeting with an accountability partner. Maybe that's the behavior you need to start for the next year. Maybe you need to hire a financial coach like me to push you to improve your overall behaviors and financial management skills, but I encourage you pray and reflect on what behavior or particular action you need to take to set this year up for success personal finance, it's 20% head knowledge and 80% behavior, if we aren't working towards improving and increasing strong, positive financial behaviors, we're going to find ourselves spinning wheels and making no progress. You must focus on improving your financial behaviors every year. For myself, a very simple goal I have this year for my financial behaviors is to read at least one book per month that relates to either my career or finances. I did this a number of years ago, and it got me back into reading on a regular basis. So I'm writing this goal down and setting it as a priority for myself once again. So that was question number five, what behaviors do we need to implement, build on or improve in order to have more success. Question six, is there an obstacle that's blocking you from just starting to create a plan or implement the behaviors you need? Wow, that's a full question. Sometimes we can hear great new information, and it has a positive effect on us, and we get an excited attitude towards like, yes, this sounds great. I want to do this. It makes all sense, but I can't do it because of XYZ, or maybe the situations we're facing in life are just too overwhelming, and we think there's no way I could possibly do this. Maybe we're carrying around like a heavy burden, and it might not even be financial. Maybe it's a tough family situation. Maybe it's a relationship that we're really struggling in. It could be unemployment or underemployment. Perhaps we're dealing with an emotional or mental challenging situation, and we need help. We need to make that a priority. Right? Our priority number one should be to get the help we need. It can be life changing when we have someone in our corner, maybe it's a friend, a therapist, a coach, that can sometimes just help us see past the situation that we find ourselves in, you'd be surprised what another perspective could do for our situation. Identifying the need to have someone in your corner is a great place to start challenges that we face. Typically, they don't go away on their own, but they only get larger as they get closer. And if we want to be able to push past them, to overcome them, we need to prayerfully find support and wisdom so that we can tackle them head on. I encourage you to do that, get someone in your corner, but also to pray, and there is a link in my episode description for this episode to get in touch with me. I am happy to help you identify if there is a particular person or a resource that can benefit you in your journey. So that was question number six, is there an obstacle that's blocking you from starting to create a plan or implement the behaviors you need? Question number seven, how is my total overall financial health? Another way to say that would be is my whole financial. Situation in good order. You might ask me, What does this mean? So as Catholics, we believe that everything we have belongs to God, and he requires us to use wisdom and prudence as we plan out all the different aspects in our role as stewards of what he's given us, this means having good order in our life and prudently using what we what we have received from his generosity. Here's a simple checklist to determine our overall financial health, and it looks at every aspect of our finances as well as some other important items. It's actually it's, I give it away to my coaching clients for free if they sign up for my email list, right? I'm going to put a link in my podcast description so you can get it for yourself to start to use, but I'll walk you through the checklist real quick. Here's the checklist. There are five different sections. The first section is monthly activities. And on the checklist, there's little just squares that you could literally just check off, right? The first one is, do you create a monthly budget? Do you update the budget weekly with completed transactions. Are you contributing towards retirement? Are you contributing towards savings? That's the first section, monthly activities. The next section, it's about debt. Do we have a plan to eliminate debt? Are we paying off credit cards every month? Do we avoid debt when making purchases? Do we avoid debt when we're in an emergency? I have a little important item section, so this is stuff that's more, I'd say, even legal than financial. But do we have a last will and testament, and that's something we all need. Do we have healthcare proxy and a living will? What if we're incapacitated to make decisions for ourselves? Do we have that in place? The same as for the next one power of attorney. Now, if you're we're married, it's, yeah, it's going to probably be our spouse, but we want a legal document that makes it super clean and it's already done and in place. Whenever there's a crisis, if we have to create legal documents, it just compounds the stress of the crisis. So have these all in place today? The last one just financial information. Is it accessible, right? If I'm the one that pays the bills and handles a lot of the transactions in our household, if something happened to me, is Taran able to get her hands on that quickly she is she knows where all the logins are and where all the accounts are. There's an insurance section on my wellness checklist, and we should really review our insurance policies annually. So there's, again, just kind of square checkbox, bullet points, identity theft insurance, health insurance, car insurance, homeowners or renters insurance, umbrella insurance policy, Long Term Disability Insurance, long term care insurance, if we're over 60, and term life insurance. And then the last thing we want to review is the section that I call our relationship with money. Do we have control over day to day and month to month expenses? Are we living within our means? Do we have a capacity to handle a financial emergency? Are we worried about our long term financial plans? Do we have the freedom and ability to make financial decisions that allow us to enjoy life? Do we create financial space to be able to give and be generous? That's the checklist. I will make it available in the podcast description so you can click a link to get one. Download a PDF for yourself, if you'd like to use that, use it with your spouse, and if this is your first time, even beginning to look at your financial situation and you're trying to just figure out, like, Where do I even start? I highly recommend starting with this checklist. It's a helpful barometer, just to see where you might have the biggest gaps in your financial health. So that's what I have for you today, seven questions and that little checklist, but seven questions to help you assess and plan out the next year's financial goals and activities. I'll give them to you again, just real quickly here as just quick bullet points. Question one, where did we win with money this past. Year. Question two, where did we fall short this past year? Question three, are there any goals or areas we fell short in that need to become a priority for this next year? Question four, are there any major financial items or transactions that are newly approaching for this year? Question five, what behaviors do we need to implement, build on or improve in order to have more success this coming year? Question six, is there an obstacle that's blocking me from just starting to create a plan or implement the behaviors I need? And question number seven, how is my total overall financial health? And again, use that financial wellness checklist for that last question. There you have it. Seven questions to help you assess last year and plan for the New Year. I hope this has been helpful. Thank you for joining me today, God bless Thank you for listening to Catholic money talk. I hope you join us again next time, please click Subscribe on your podcast app to get notified of new episodes. God bless you and have a great day. Foreign you.