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Time to figure out what your money is for

What is my money for? It's the question Bruce Sellery, authour of Moolala: Why smart people do dumb things with their money (and what you can do about it), thinks you should answer - today. And after reviewing his book, I see why. The idea of creating a money context is simple and straightforward and, if done right, has the ability to transform our financial outlooks and easily alter our financial decisions for the better.

If you're answering this question for the first time, your gut reaction might be: my money is for adventure, travel or beauty, but then you might start thinking about the kids, the leaky roof, the looming debt, and change your answer to "security" or "survival." Security is essential in personal finance, but it's not motivating or exciting. Creating your own authentic context by answering the above question gives you a reason and a motivation to take care of your finances and help you to do the things you probably don't want to do - set up a retirement account and make a plan for future spending - in order to get to the ultimate intention for your money.

It's not a one-size-fits-all model. My money is likely for something different than yours, but there should be one or two words that are right for you and those are the ones that resonate with you, empower you and motivate you. Don't second guess yourself when doing this exercise, or stop yourself because you feel too far away from your desired use for your money. Claim the context that is right for you. If you've never thought much about what your money is for, it's likely you're using the defaults inherited from family or friends or society.

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Putting your money into context also gives you a new money language, according to Mr. Sellery. It gives you a clear definition to articulate to your family, friends and adviser, which will help you make choices and explain future goals and plans with those around you. Creating context for your money also provides you with something to check your behaviour against. Is your behaviour consistent with your answer? If you said your money is for travel and then buy a new spring jacket on your way to meet friends for an expensive dinner downtown, either your goal is off base or your actions are.

The remaining chapters tackle the other key factors after context - consequences, complexity and community, and builds on how to reach you money intentions. Not sure where to start? Mr. Sellery suggest taking a blank sheet of paper around your home and looking at photos, books and mementoes, and thinking about what you value, enjoy doing, and what's important to you in your life that money enables you to do. Your one or two-word answer will evolve over time, but it has to empower you today and resonate with no one else but you.

How would you fill in the blank? My money is for ____________.

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About the Author
Angela Self

Angela Self is one of the founders of the Smart Cookies, a group of five women who specialize in personal finance. They are hosts of a self-titled show on the W Network and the authors of The Smart Cookies' Guide to Making More Dough. More

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