The wonderful thing about a new year is that it seems like a nice time to create new habits. So today, we’re going to work on planning your financial success.
What does financial success mean to you?
Working Backwards for Success
The best way to achieve success is by figuring out exactly where you’re starting from. So set aside some time and gather up your financial information. Then you can either do the next step on paper or by using a spreadsheet on a computer.
Understand Your Cash Flow
Create a list of months and write down the big payments. For example, maybe you pay your car insurance in August and February. It’s important to know how to save up for the larger expenses to manage your cash flow. Then figure out what your monthly payment would be if you were paying the bill each month.
Next account for your fixed monthly expenses like rent, online streaming subscriptions, or your phone bill.
For items like utilities, they could vary month-to-month. Try to find an average amount over the year. That way, you’ve got the extra money when you need it for a high electricity bill.
Then, you want to find your other variable expenses such as groceries, gifts that you give, fuel, automotive maintenance, and whatnot.
What’s Your Per Day
No, I’m not going to bring up the “b” word yet (budget). I want you to remove any overwhelm or guilt you may be feeling. Go ahead and add it all up for the month, and divide by 30. That is how much you need to earn each day in order to maintain your current lifestyle.
That’s not so scary, now is it?
And if you make more than that per day, you’re doing pretty well!
But Where Does It All Go?
Maybe you’ve been wanting to save more for a holiday or something special, and yet you never seem to be able to have extra at the end of the month. I know that keeping track of every cent may seem like a lot of work.
There are some great apps out there that make it easier. And no, you don’t have to track every cent all the time. For the first few days, you may want to be a little more vigilant so you’re aware of your spending habits. When you become more conscious, you’ll be in a better place to make adjustments.
But first, let’s talk about setting your financial goals.
Do you know how much you want to earn in 2018? Perhaps you have a good income and want to earn a few hundred extra a month to pay down debt or save up for a holiday.
Remember in Recover from the Holidays, I mentioned how important it is to journal your feelings? It also helps to journal your financial dreams, and journal your money beliefs.
Sometimes we are dealing with subconscious beliefs like “I’d have to work all the time if I want to be rich.” Or “Rich people are mean so I don’t want to be rich.” If we said it out loud, we’d laugh.
But it’s important to take these thoughts seriously, and learn how to reprogram them out of your brain, and replace them with positive and enriching thoughts like “Wealthy people are generous,” and “I have all the time I need to spend on what is important to me.”
I have been using this – 13-week roadmap. What I love the most is that you get so much done in three months. Often we have our annual goals, and nothing really gets done until the last second when we should have been gaining momentum each day. Plus, it’s more motivating to see your next steps right in front of you broken down into easy actions.
The key to success is to ensure that the goals are specific, measurable, achievable, realistic and have a time period associated with it. So you may have an annual goal of wanting to save $10,000 for a buffer in case of financial emergencies. Then you start to work backward to identify your goal for the end of thirteen weeks.
In this case, it could be $2500 saved up in a special account. In order to achieve that, you will either need to spend $192/week less or earn $192 extra per week. And you can also do a combination while you’re building up momentum.
And you don’t have to limit yourself to just those ideas. Spend some time brainstorming additional paths. You could decide to auction off some unwanted items like clothing, jewelry or kitchen appliances that you no longer use.
Or perhaps you want to set up a home-based business like InnerOrigin provides. It’s an easy way to bring in some extra money while recommending quality products that have been independently tested for Truth on Label, are sourced from within the community, are priced the same as the store, are delivered to your front door and have a 30-day money back guarantee. You can learn more at www.innerorigin.biz
Most of these apps are available for your smartphone and are accessible on your computer using a web browser. That means that you can be on top of your finances anywhere.
Mint is made by Intuit, the makers of Quicken and QuickBooks. You can connect up with your financial institutions and immediately see your balances and transactions.
It’s easy to verify that the amounts you spent are correct. And it’s also a fast way to ensure that your card numbers weren’t stolen or used inappropriately.
The only downside of Mint is the lack of reporting. You can’t get a cash flow report. However, it does have reminders of upcoming bills due.
Mint also has a budget section. However, it builds a budget based on your goals rather than what you want to choose to spend.
Mint is free to download and use. You will need to create an account, and then you should hook up your accounts so Mint can do all the hard work.
If you’re living pay-to-pay, you may want to check out You Need a Budget. It’s not free. However, they provide support and lots of online training. Plus, you’ll be a part of a community going through the same struggles you are. They’ll help you only spend the money you have.
If you overspend in one category, you can “transfer” funds from one that still has money into one that needs money. That way you’re in control of where your spending happens.
If you just want to track your expenses, then you may want to look into Wally. You can use your smartphone to take a picture of a receipt, and Wally will add it to your account for you. Wally lets you put in an amount for your budget and then deducts what you’ve spent. So you can easily see how much money you have left to spend that day and that month. (Wally shows both)
Wally is most useful if you are wanting to see roughly where your money is going. It’s not available to access on a web browser, so you can only use the app on your smartphone.
The app is free to download and use. And the development team is always asking for feedback since they want to continue building out a useful app for people worldwide.
This week, spend some time looking into where you are at right now with your finances. Then decide how you want to set goals and achieve them this year. Finally, decide how you want to track your progress.
Then you will want to set reminders to review how you’re doing regularly so you can stay on track. Remember, an aeroplane is off course the majority of the time. The pilots are always gently bringing it back. Be the pilot of your life.