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Have you ever made a plan for your finances? 

A few years ago my answer would’ve been no or not long term.

How do you think you will retire one day? How do you think wealthy people become wealthy? What are you doing about your financial well-being?

If you aren’t setting a financial plan for yourself then you are setting yourself up for financial failure. How many times have you heard of people getting wealthy from a “get rich quick” scheme? Or winning the lottery and retaining that money? 

More often at the hospital I hear people talk about how they are retired but living off of Social Security and Medicare but that isn’t enough for them, and for our generation who knows what that will really look like. Learn from the mistakes of others, few in our generation will have a pension and social security will not sustain your way of life in retirement. 

Instead it is the people who understand the importance of setting a plan for their finances that become wealthy in more ways than one. It is up to you to plan that for yourself. 

Everyone’s financial plan is different. Everyone values and prioritizes their necessities, wants and dreams differently. Therefore, you don’t need a cookie cutter financial plan, you need a plan that you can tailor for yourself.

If you’re ready to start planning your financial journey read the guide below to create your financial plan.

What is a financial plan? 

This isn’t what you may think, I’m not gonna talk about where you should be putting your money or how to invest. 

A financial plan is simply a plan or framework for how you want your life to go and how your money will help you fund that life. It’s something that everyone should do regardless of your income. Because everybody wants to dream of the future, but how many people lay out how that will financially happen?

Everyone’s financial plan will be different depending on your life‘s complexities. This is an a one size fits all planned this is a tailor plan to your needs guide. 

Why do I need a financial plan? 

If you want to retire one day you need a financial plan!! 

The only people who don’t need to plan for their financial life are those that wanna work until they die. Someone who doesn’t want to save anything, they want to YOLO and spend their money on the here and now. 

Even if you’re living paycheck to paycheck you can still make a financial plan. Going through this guide will help you figure out your finances. 

Financial Plan Guide

1. Look back. 

Before you can start planning for your financial future you must reflect on your past and current money journey. How can you move forward without knowing where you’ve been? 

You don’t want to repeat the ways of your past if they haven’t moved you toward your goal at this point. 

This isn’t meant to shame you for your past choices, I know that I could’ve done things very differently. But we learn from our past if we look back with acceptance and humility. 

    • Reflect on your experience, think about what you spent your money on, how you thought about that spending, and how you felt at the time.
    • Reflect on your learning, analyze you’re experiencing compare that to what you’ve done in the past and how you want to move forward. What did your past experience do for you? And what can you learn from it?
    • Apply your experience and learning, after you’ve learned what you need to move forward with a new financial plan take what you’ve learned and apply it to your current plan in order to not derail you.

2. Write down your financial goals. 

Short and long term SMART goals. This step is where you figure out your intent.

Do you want to set solid goals that give you direction and clarity and making decisions about your finances. Think about what you ultimately want to do with your money.

This is where you get to dream. You get to set real goals that are attainable for you. Do you want to be debt-free?  Do you want to own your own home? Do you want to live for free? Do you want to be a millionaire? Do you want to retire early? Do you wanna pay off your house? Do you want to be financially independent? What does that even mean? We will come back to that. 

There’s so many things that you can do with your money when you weren’t paying it to someone else. 

Write down your long-term goals first. 

Where do you see yourself ending up? What does your working life look like? How much money do you want to make? What does your retirement look like?

Answer these questions to determine your long-term financial goals. Then work backwards, what short term goals do you need to achieve to help achieve your long-term goals? 

Do you need to get debt-free so that you can put that money towards retirement? Do you need to purchase a multiplex so you can have other people help pay for your mortgage? Do you need to open up a brokerage account to start saving extra for retirement? 

You have so many options you just have to find the right ones for you. Setting goals can keep you motivated and accountable, so you spend less money and stick to your budget. 

It’s important to understand that your goals aren’t set in stone, as your life changes your life goals change and your financial plan may change with it. 

3. Write down your numbers (Budget). 

Everyone who wants to get in control of their money needs to know where their money is going. This involves looking at your income and spending, knowing where your money is going, making sure you are living within your income, ensuring you are prioritizing your values and goals.

Life Changes by You Budget Template

Everyone needs some sort of budget that works for them, our budget is a Google sheet that we track on a monthly basis but update on a weekly basis. You can do a hand written budget or an Excel sheet or check register. 

It doesn’t matter where you write it down at, as long as you were doing it consistently. 

The number one priority when doing your budget is to make sure that you were spending less than your income. 

When you write down all of your spending you are finally reflecting on where your money is going, this can be a big awakening for many people on how they spend their money. 

If you need a basic way to determine how much of your money needs to go to certain categories here is basic budget principles 50/30/20. 50% of your take-home pay goes towards necessities including housing, utilities, transportation and other reoccurring payments. 30% goes towards wants including dining out, clothing, entertainment, etc. And 20% goes towards savings and debt repayment, depending on your focus. 

I personally think that these numbers are basic, I do not believe that 80% of your spending should be spent on the here and now spending, I believe that savings should be more than 20%. But, this is a good starting off point for those that need a foundation. 

If you are heavy on the necessities then you are less able to put money towards your long-term goals because you were living in the here and now. Google contentment you may learn something new, that’s what I had to do.

 If you believe that spending 50% on necessities or 30% on wants is too high for you then that’s good too you can increase your savings rate.

4. Start saving.

If you aren’t saving you are failing. Not everyone agrees with this and that is fine. 

But not everyone can or wants to go gazelle intense with their debt payoff and that’s okay too. Some people need incentive or want to take a trip they’ve been delaying for so long. 

I know I didn’t want to give that up. By saving a little bit each month we were able to make things happen even when we were paying off debt. Sure we traveled on a budget but we were still able to enjoy ourselves, take a break, recharge then get right back to it after. 

Many people live paycheck to paycheck without savings, if unexpected expenses come up it might seriously throw off somebody’s financial plan. If an emergency came your way and you needed $1000 how would you pay for that? 

Of course I advocate for an emergency fund, but I advocate for a realistic emergency fund. 

I don’t believe that everybody needs six months of expenses built up if they don’t want it or needed to feel secure. 

Saving is for more than just an emergency fund though. If you celebrate Christmas each year but put your gifts on a credit card or limit how much you spend because you don’t have a lot of money that month then you’re doing it wrong. This just like many other things that come up on an annual or more frequent basis and if you plan for it properly by saving a little bit of money each month then you will be prepared when it comes around again.

5. Plan to pay off consumer debt. 

This is only holding you back. 

The more that you have the harder it is to kickstart your financial future, no one likes thinking about their debts but if you ignore it you are hurting your financial future. 

If you were thinking there’s no way I can get out of debt I have too much but I can afford the monthly payments. This is the wrong mindset, this is a limiting belief. You don’t have to be some who believes you will never get rid of your student loans or mortgage. 

You shouldn’t have to spend your life working because you have to make these payments.

If you make a financial plan and a debt payoff plan your life can be dramatically different, it can be whatever you want it to be. 

There are two common ways of paying off your debt, the debt snowball and the debt avalanche. Both are good you just have to choose what works best for you. There are more savvy ways of paying down debt too, including the debt lasso. 

But the most important part of this step is to choose away and get started. This has the potential to change your life, forever.

6. Prepare for retirement. 

Determining what retirement looks like for you is the first step in preparing for retirement. 

Everyone’s idea of retirement looks different. 

Have you ever thought about what you would do on a typical day in retirement? Or what special things you would want to do? Have you ever thought about how much money that would take? 

You can’t know how much money you’ll need a nest egg if you don’t know how much your lifestyle will cost. 

    • What is your desired retirement age? 
    • What is your desired retirement lifestyle? 
    • What is your current health status? 
    • And what is your current savings rate?

If you’ve done the work to plan out your retirement goals and expenses you can work backwards to determine how much money you need to invest now to get you to your goal by your desired retirement date. 

Investing for retirement looks different for everybody depending on their risk tolerance and their desired investment assets. Some people choose real estate some people choose stocks And others choose a combination. Not to say that there aren’t other ways of investing but these are the most common.

7. Plan for taxes. 

After determining what you need in retirement you can determine what type of investment vehicles your money goes in. 

There are many tax advantaged account types, two common types are a Roth versus traditional account. 

If you don’t intend to live in extravagant lifestyle in retirement you may benefit from having your investments in traditional retirement accounts, which is the tax deferred accounts. Your money goes into the account pre-tax which decreases your adjusted gross income (AGI) and depending on when you pull out that money, if you were living a modest lifestyle in retirement, your taxes may be slim to none. 

Roth accounts use after tax money to invest, then grow tax free can be pulled out, at traditional retirement age, tax free. 

This is something that you can project with a CPA, because I am no tax expert and everybody’s situation it’s different.

8. Get properly insured. 

Don’t mess this one up. 

Have you ever thought of why your state requires car insurance? Is it because that the majority of people could not pay for a new car or medical bills or somebody else’s car if they were in an accident? 

The same goes for your life, your home, your assets, your health and your ability to work. 

That’s why depending on your life circumstances you may need life insurance, homeowners insurance health insurance, auto insurance, and disability insurance. Those are the big ones. 

There are other but most of the time they are gimmicks to scare people into buying their products. 

If you couldn’t pay for a new car out right who’s to say that your family could survive if you were to die or you can rebuild a home if yours was to burn. 

These are the things that you have to think about so that if you were ever put in that situation you don’t have to stress about money on top of the stressful situation you are going through. 


9. Review your plan frequently. 

If you are doing life right you are  constantly learning even if you’ve got a plan set. 

Therefore, as you continue to learn and gain more knowledge you may diversify your financial plan. As these change you will readjust as needed. 

You should check on your overall financial plan at least every quarter. When you check less often you are more likely to derail from your long term goals. 

At this time you’d want to check on your spending habits, reflect on unplanned events, redirect any setbacks, and reaffirm your overall financial plan aligns with your life goals.

If you need help going through this guide and/or need some accountability you can always join my coaching programs. Schedule a free 15-minute call, click HERE

If you are ready to schedule your Aha Session with me, click HERE

To Review:

1. Look back.

2. Write down your financial goals.

3. Write down your numbers.

4. Start saving. 

5. Plan to pay off consumer debt.

6. Prepare for retirement. 

7. Plan for taxes. 

8. Get properly insured. 

9. Review your plan frequently.