66 – Drive Change

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Episode Overview:

Leadership. Ken has talked about it time and time again. This week is no different. You need a leader in order to enact and drive change in your financial life. To make this happen, you must set and keep resetting the vision for you project. You must establish a “why” in order to have everyone around you buy into this vision. Set milestones and establish a cadence of realignment. Ken gives a real-life example to help you understand how to put these principles into action.

Transcriptions are auto-generated, please excuse grammar/spelling!

Happy day to you. This is Ken Kaufman, and I’m thrilled you’re here for episode number 66, How to Drive Change. Now, I’ve been on a bit of a leadership kick lately about being the leader of your personal finances. And today, it’s not gonna slow down. Today, I’m gonna talk through the critical leadership responsibility of driving change and creating change. What do you need a leader for if everything’s gonna stay status quo? What do you need a leader for if you’re not going to try to make improvements and grow and get better from a personal finance perspective? And so, one of the main roles of a leader is to create a vision and to find ways to make improvements and make sure that they get everybody else around them aligned. And, you know, you could say, “Well, why in the world would we bother to change?” You know, maybe you’re really happy with the progress and things you’re doing financially. You only wanna initiate change if you think you can create a better outcome than you’re already headed toward. And I’m gonna get into an example here of what I mean in just a second. And the reality is, we can’t always predict what the outcomes are going to be and leading change or creating change and a whole bunch of work and stress and pain and effort to change something because it can be a very heavy lift to change something, you wanna make sure that you see the benefit on the other side. So, as I go through, I’m gonna go ahead and I’m gonna explain to you this process of how to drive change, and then I’m gonna layer in an example along with it.

So, the first step to driving change is to set and keep resetting the vision for your project. You are gonna be beating the drum of this message over and over again. And I cannot stress this part enough. You have to answer the why in your vision. You have to explain why this is so important. And the reason why is because it’s just hard to get everybody aligned and put them on the effort for change until they see the why, and they get a chance to buy-in. And especially, it’s getting people to buy in to change and actually accept it and then do things the new way or accept the new norm. Ultimately, it’s because the change is gonna make things better and they will be drawn to want to accept the change. And the quicker you can help them catch the vision and then see and start to feel the benefits of the change, the quicker they’re going to adapt and change from old ways to new ways.

Now, let’s say that you want or you’ve decided COVID-19 has taught you that you want to have an emergency fund and you didn’t have one before. And so, you’re thinking about making a change to your financial life, and it’s gonna require some hard work and discipline outside of going and say winning the lottery or gaining an inheritance that would be enough to constitute an emergency fund. And it doesn’t matter, 3 months, 6 months, 12 months, whatever your goal here is, plug in a date. But the goal is an emergency fund. And you say, “My vision here is, is we need to create an emergency fund because we did not feel comfortable going through COVID-19 and knowing that we could have lost income,” or maybe you did lose income and the fear and the stress that that created on you, it would have been much better if you’d had an emergency fund to fall back on and as a safety net. So, if that’s what your goal is, you come up with that why, you felt this pain and you don’t wanna feel it again.

The second step here is to then document. So, what is it that you’re going to do and get into the details about, okay, we’re gonna save, or you and your spouse if you’re married or significant other, you are going to save $100 dollars a month or $100 a week toward this goal. And you put that down and you document that out so you can see it, you know what needs to be accomplished and build a little spreadsheet or some type of model that says, “Hey, if we do $100 a week, here’s how long it will take for us to get there,” so that you can measure major milestones along the way. If, say, you want that emergency fund to be $10,000, you might wanna just celebrate every time you break $1,000 or every $2,000, or, you know, the halfway point, and the three-quarters way point, whatever it is, create yourself some really nice milestones because it’s a grind. It takes a long time sometimes to accomplish these goals that we’ve set for ourselves. And so, to have these milestones along the way can be very gratifying to say, “Yes, okay. We’ve passed that milestone.”

Now, once you’ve got it documented, and your major milestones are all dialed in and in place, and you’ve got these celebrations or, you know, lined up so that you can hit those as you go, the next step is you develop a cadence of accountability, realignment, constraint identification, and so forth. So, this cadence is usually a meeting, you and your spouse can get together, whether it’s at your monthly budget meeting or wherever it is, where you take a look and say, “Okay, here’s what we’ve done, and here’s what our plan said, and we’re on track or we’re a little behind because we had this emergency come up,” or whatever. You have the ability and this cadence to watch and see how it goes. And then if you’re falling behind, you can start to identify the constraints. What is it? Are there other emergencies, or did you not save the money because you decided to do something else with it? Whatever those challenges are, you can identify them, call them out, and then recalibrate your plan to get you on track to where you wanna go. And it continues to get everybody realigned around the goal and the plan also. If we’re falling off the, you know, we’re falling off the horse here in relation to making sure we’re saving up for this emergency plan or emergency fund.

Then, as each constraint comes up, you work to solve. And so, for example, if, you know, you have an emergency, a car repair comes up and not only you couldn’t put $100 a week away, but you had to actually pull some out of the emergency savings in order for you to be able to cover that car repair. So, you look at that constraint, you identify it, and then you start to plan around it and realize, “Hey, maybe as we’re going through this emergency fund, maybe we should set a little bit aside for that car repair fund,” or, you know, a future potential car repair that might be needed some time down the road or in the future. And then, of course, once you get all the way to the end, then you party and you celebrate. So, you may say, once we get to that emergency fund total that we’re excited about, come up with something fun, something nice, don’t have to be anything big, but celebrate that you’re there. That is how you drive change.

If you’re the CEO of a great big company, or if you are trying to drive change in your personal financial life, the same principles apply across the board. Having, you know, worked as an executive in lots of different companies through my career, these are the principles that I have applied where I’ve been put in charge of having to drive change in the organization, and they just work. And there are other principals that work too. I don’t mean this list to be comprehensive, but when you look at leading your financial life, these tools and these principles will help you to drive the change that you want and you desire and empower you to be able to get spouse aligned or other family members or anyone else that’s involved in your financial decision-making process. Many, many thanks to you for joining today. This is a wrap for episode 66. Happy day.

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About the Podcast

Join Chief Financial Officer Ken Kaufman as he helps you track and hack your net worth. For those seeking financial independence, your net worth is one of the most significant measurements of success. Using his two decades of financial experience, Ken Kaufman helps you overcome your financial obstacles and look onward towards a better, brighter financial future.

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