Simple Financial Planning

Financial Planning

Many people approach me about personal finance. I often hear them say things like “I don’t know what I’m doing wrong. No matter what I do I can not catch up.” Or, in not so extreme cases, “My bills are paid on time every month, but I never have any money left over to save.” These are two of the most common scenarios I see people going through. They have more in common than you might think.

Planning = Success

The fact of the matter is, as long as you are aware of your money problem and made the effort to come forward a ask for help you are actually in better shape than you think. It’s like what you hear in an AA meeting; Admitting you have a problem is the first step. Someone who continues their path of poor spending and saving habits is likely to remain that way. Those who speak up and seek help are far more likely to succeed and change.

The easiest way to get out of bad money habits is to have a plan. What plan, you ask? Well… any plan, really. Much like admitting your problem increases your odds of changing, putting a plan forward will help even more. Many times I have seen the pieces fall into place for someone as soon as they set boundaries and rules for their spending. Like pushing the first domino and watching them all go. What I am going to share with you are some simple planning-based solutions for common money problems.

Paying Bills

If you are having a hard time paying your bills on time you may not be thinking far enough ahead. For this example, let’s consider a rent payment that is due on the first of the month.

A smart way to make sure your rent is paid in full and on time is to set aside a portion of it with every paycheck. If you get paid every Friday and your rent is $800 you should be setting aside $200 every week. Every month has at least 4 Fridays in it and sometimes 5. Thinking of the rent as a weekly expense instead of a monthly one will get rid of the “I’ll deal with it later” impulse. Keeping your outlook further in the future will help you see the bigger picture.

Planning a Vacation

Many times, planning a vacation can be enough motivation to improve responsible spending habits. Viewing the vacation as the big reward is a healthy way of staying disciplined.

If you are the type of person who likes to take impulsive (often expensive) weekend excursions, this idea is made for you. First you should calculate the overall cost of the vacation. Based on your monthly budget (which you can easily calculate with Dean Myerow’s Simple Budget Calculator) determine how many weeks or months of saving it will take you to save up for the vacation. You’ll find that as long as your mind is set on taking that vacation, you are less likely to splurge frivolously.

Getting out of the “go with the flow” habit will instantly improve your financial health. An exercise as simple as planning ahead is often enough to jump start your appetite and willingness to save money. Stay tuned to Dean Myerow Finance to improve your financial situation with more tips.

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Dean Myerow
Dean Myerow retired as a municipal bond market asset manager for Las Olas Wealth Management in June 2018. He has earned degrees from the University of Massachusetts School of Business and the University of Miami School of Law.

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