Since becoming a mother, I notice that I’ve also become a planner. There’s plan for just about everything going on in our family. Unfortunately I started planning the financial aspect of my life a little backwards. I jumped right into making a budget without having a financial plan in place. While I did well at sticking to the budget.. for the most part.. it would have been so much more beneficial to have a financial plan in place first in order to eventually reach some of my goals.
Making a plan.. setting some goals.. is a way to visualize where you want to get in life. It doesn’t have to be anything complex or fancy. I recommend listing some short term (1 year) goals, a couple of future goals (5 years), and a few long term goals (10+ years).
One key to this plan is flexibility. I’m not suggesting you make a permanent plan for the rest of your life in one afternoon. Life happens.. and your plan can be revised accordingly.
Here are some ideas for potential goals in your financial plan:
Short Term (aprox. 1 year):
-Pay off student load debt
-Buy a more reliable vehicle
-Have an emergency fund of $1,000 (that’s good ol’ Dave Ramsey advice there)
Future Goals (5 years-ish):
-Have zero credit card debt
-Save for a home
Long Term Goals (about 10 years):
-College savings for kids
-Buy a home
-Increase retirement savings
Now that you’ve got the goals lined out, it’s best to break each goal down with its own list on ways to achieve it.
Goal- Pay off student debt
Plan- Spend less each month on eating out
look into a side job
pay as much as possible to avoid interest
Another huge key to the financial plan is continually reviewing it. You’ll hear all the time that visualizing something is the best way to achieve it. Now I’m not saying you need to make it the wallpaper on your computer screen… save that spot for the kiddos or a fantastic beach sunset shot. But simply making it a point to look it over once a month should suffice.
Reviewing your financial plan will also help hold you accountable. Not necessarily to someone else, but to your own biggest critic.. YOURSELF. You’ll see the plan you made.. what was important to you at the time.. and you’ll be able to see how far you’ve come (or how much you’ve wasted spent on Starbucks instead).
And now that you’ve created your awesome financial plan you’re ready to make a budget. Yes, your very own grown-up list of income, expenses, and essentially a detailed look at where all that cash is going.