We give a lot of basic money management advice, but nothing is more essential than our most basic rule: you have to have a plan.
It also means planning for retirement. Planning for goals. Planning for how you are going to store your accumulated wealth. A financial plan is a lot more than investing, and a lot more than budgeting.
To create a financial plan for yourself and your family, you’ll need to sit down and start from the beginning. If you’re working with a partner or spouse to create a sound plan, talk about your values and attitudes towards money first. If one of you is a saver and the other is a spender, you’ll have a lot to talk about, we’re sure.
What are your priorities?
Begin to think about your priorities for the future. What are you working toward? Homeownership? A new car? Growing your family? Money management is the most effective when there are clear goals in mind. And goals that are shared by everyone in the household are the most likely to be met.
This may seem too elementary to some, but the act of sitting down and writing out one’s goals is crucial. If you walk through life without a clear purpose, you’ll never get anywhere. Write down your goals and give yourself direction.
There are a lot of statistics out there about how those who write down their goals achieve greater success than those who don’t. Further studies show that those who share written goals with a friend are even more likely to succeed.
After you figure out what you want and why you want it, then you can start planning for how you are going to get it. That’s where the real money management comes into play.
Start by tracking your spending. That’s the only way to get the information you need to create a new spending plan that will actually work.