Dec 272014
Family on the bridge

How can you bridge the gap between where you are and where you want to be to achieve your winning why?  You need a road map (spending plan)!

Yes, it’s time to work on a spending plan (doesn’t that sound better than budget?)   This is your road map to success.  Just like you wouldn’t set out to drive from New York City to Los Angeles without a map if you didn’t know the way by heart, you will want a map, or guide, to help you reach your financial goals.  This road map will help guide your choices to maximize your chances of reaching your goals.   The ideal route is different for everyone and is based on your personal values.  Remember to reach for the things that matter most to YOU.   Here are some questions to ask to help you get started:

What do you value enough to sacrifice immediate wants and delay gratification?  Keep your values always foremost in your heart and in your mind.   This will help you develop the discipline to succeed.

Do you want to take the direct route to your goals, or do you prefer a more scenic highway with a more leisurely pace?  Success means different things to different people, and that’s OK.   Do you believe it is important to achieve your goals as quickly as possible, or are you happier slowing down a bit and enjoying the journey?

What key responsibilities do you need to fulfill to honor your deepest values?  This includes things like time with your family, volunteer work, and continuing education.   Remember to include these things on your map as you plan your journey to success!

Do you have spending habits that continue out of simple inertia, costing you money although they no longer add anything you value to your life?  Think of that subscription to the newspaper you never have time to read or the monthly fee for the gym you never use.

Have you counted the cost?  IMHO, money is good and more money is better, but there is always a trade off.  Don’t get so caught up in always pursuing more that you wind up rich, lonely, unhealthy and unhappy.

Take a look at your income and your current expenses.   Your income must be higher than your expenses if you are to make progress toward your financial goals.  If you find your expenses are higher than your income, you must cut back on spending or increase your income.  Hopefully, this will involve minor adjustments, but some people will find that they need to downsize their home, take a second (or third) job, or find a way to make a hobby pay off for them.

Now it’s time to choose your route and put it in writing.   You might complete a traditional personal budget either with pen and pencil or with financial software.  Or, you may chose to create a financial mind map such as this one.  The important thing is to have a plan that you can follow and benchmarks you can track to help you stay on track.