**Guest post by Gordon Leopard
Your Money Map: Taking You Where You Need to Go
Did you hear that?
That was the bell that echoes through the halls of our lives. We just started a new year and class “Let’s try to get it Right – 2015” is now in session. One of the top categories every year, right along with losing weight, is getting our finances in order! You are either well on our way implementing the changes you promised you would, or feeling around for the proverbial “reset” button that’s nowhere to be found. Now, was it just a good idea, or did you put together a plan to support your efforts?
Please stay with me!
Several years and careers ago, I was a teacher. I remember walking into my classroom with no lesson plans ready for that particular day. I figured, “I have this, I’ve taught this subject before, heck, I have a degree AND certification that says, I-AM-TEACHER! These critters, aka students, will follow my exceptional leadership and do whatever I ask of them with no problem…” The only problem with that thought process was, I was DEAD wrong! By having no plan, I found myself reaching for ideas to just fill blocks of time with shallow, meaningless busy work, and for some reason the students found more creative forms of education and activities. As that day came to a close, I found myself 3 shakes away from a “T” total committal level breakdown! I didn’t step back in a classroom that unprepared again.
So, this leads me to the million dollar question(s). Why do we start each year with the same old pipe dream of becoming fiscally mature beings, but spend more time putting together vacation plans than doing a financial plan that will pay for the life we need in order to AFFORD that vacation…Deep breath because of the run-on sentence. What does your plan look like for 2015? The foundation to building anything that’s going to outlast the Honeymoon Month of any endeavor, is to have a solid plan. And here’s the beauty of this mystical concept known as financial planning, you don’t have to have it “all together” in order to do a plan…(in my best whisper voice) “That’s what the plan is for…” To help put something tangible in place and serve as a guide and reference as we work toward improvement. As you start implementing the plan and putting things in motion, sure, things change, but you are moving, and hopefully in a positive direction. Here are a couple of ideas for starting that financial plan you keep running from, like it’s the villain in a horror film, or if you are in a healthy financial position, it may take you to a higher level:
- Be honest with yourself (and your spouse, if you’re married) about your current situation.Get everything out on the table, even the small boutique or outdoor store credit card that you might have maxed out and have elected email balance notifications only, so that your “other” won’t find out about it. Before you can put together a solid/complete plan, you have to have it ALL out there for you and your spouse to see.
- Do a budget!Yes, I said the “B” word that my wife used to hate for me to say. This is a critical part of anyone’s financial plan. If you don’t tell those financial “critters”, aka, Dollars where to go, they’ll wonder off in all kinds of directions: new shoes, clothes, eating out, cutesy little do-dads, fishing or hunting equipment “needs”, and did I mention eating out (yes, food is my weakness). The budget or cash flow plan is a liberator. It can let you know what you “can” do and help protect you from unnecessary financial burdens easily brought upon yourself without even really thinking about it. That is, until you get that email notice and the extra little $50 or $100 purchase has cost you $300 and 8 months or more to pay it off.
- When doing this budget, start with your basic needs – food, shelter (rent/mortgage), utilities, emergency fund savings… Please notice these are needs.I didn’t include the car note, not a need, this is a self-inflicted gunshot to the financial face that many people feel the need to pull the trigger on about every 5 years. By the way, take $200 of the average $350/month being spent on a single car payment by the average American, invest it in a Roth IRA for 30 years, earn a conservative 8%, and you will have nearly $300,000…TAX FREE!
- Prioritize items after basic needs according to your unique situation.There is no cookie cutter approach, but start by taking a look at your personal P&L, or Earnings to debt ratio. Ideally, zero debt is the way to go, however, if you’re going to date the “debt creep” make sure you pay him no more than 20% of your weekly/monthly income. He’s a jerk and you’ll hate him, get rid of him as soon as possible!
- KISS it!Keep It Simple…Sally or Sam J Start with a simple cash flow/budget plan and as your situation changes, so can and will your cf/bp!
- Stick to it!If there is one thing I can GUARANTEE you… You will NOT get it perfect and that’s OK! Just don’t let it snowball on you in the wrong direction. Make adjustments or find a way to supplement your income without sacrificing the “things” that really matter most…and I don’t really mean “things” as in things!
- GET HELP!If you have never done a budget or have some serious financial issues or “secrets”, then you might want to find someone you trust and has some experience in this area of financial stewardship. There are TONS of resources to choose from. Personally and professionally, I prefer and recommend resources that support a Biblical view and approach to this subject. Crown Ministries (www.crown.org), Dave Ramsey (www.daveramsey.com), and the Ron Blue Group (www.ronblue.com) are three great groups that I have personally and professionally utilized.
Now, even if you think you missed the deadline to “turn in” your budget assignment or you’ve slightly wandered astray from the “plans” you put in place January 1, don’t give up and wait until next year because this year is busted. In my most encouraging, lively, yet not quite over the top voice…”START NOW OR AGAIN, YOU CAN DO IT…”
AND IF YOU NEED HELP GETTING THIS THING STARTED, SEND ME AN EMAIL @ firstname.lastname@example.org.