Friday, May 2, 2008

Financial Plan Wrap Up

Let’s quickly break down the plan to just the basics. This way if you haven’t gotten started you can make your own plan quickly.

This is a basic plan…

Step One- Create a plan to begin or complete an Emergency Fund.
Step Two- List all debt and create a plan to pay it all off.
Step Three- Create a plan to save up at least 3 to 6 months’ income
Step Four- Create plans to save for retirement, save for child’s college or pay off mortgage (as you get closer to this step you break it into three separate steps.)

Now here is what each step should consist of….
Goal- In simple language write down a goal that you want to accomplish. Ex: Save $1000 in an emergency fund.
Plan- Write down every single thing you plan to do in order to accomplish your goal. If you are on the debt step you will also list every debt you owe along with how much you pay each month. For each step list ways that you can expedite the process. Ex: cut out movies, coffee, whatever… For goals that are in the distant future this plan can be a simple sentence.
Maintenance- Write down what you will do to insure this step does not come undone. See the plan pages for more details on this step.
Completion date- This is optional but if you figure out how many months each step will take to complete it may motivate you. You could also set this date sooner than you expect to finish to push yourself more.

**Remember- Everyone is different. You may want to add more steps to your plan. Maybe you want to take a year off to care for a new baby; you can figure up your expenses and add that as a step in your plan. This is your plan, make it for YOU!

I hope this week’s articles have helped you develop your own financial plan. It really does help to write your plan down so that you can review it and stay on track. I have been doing this for almost a year. My plan has changed a few times but having it where I can see it reminds me of my goals and how close I am to completing them.

I hope to get some reader input here. One of the hardest things to do is find extra money to put toward savings and your debt. Please list your own ideas or where you have found extra money.

Some of my ideas…
Use coupons and shop for items on sale. Keep track of the money saved and either save it or put it toward your debt.

Look in the side bar. I have links to Cash 4 books and some of the survey companies I have signed up for. I also list my experience with each one and whether it is worth it or not.

I am also now a really big fan of Craigslist since you can post your ads for free. It just depends on how used it is in your area. So use this to sell old items you aren’t using and make some extra cash.

Cut back on dining out or movies. Even cutting out one time per month will save you money. Although if you have significant debt you probably shouldn’t be going anyway!!! I haven’t been to a movie in probably a year or two.

Any small thing you can do will add up in the end. If you have any questions about the plan feel free to ask!!

No comments: