Managing your money is a little bit like going camping or hiking. You spend a lot of time preparing and packing for the journey and then you’re off, ready to see where the road takes you. But what happens when you forget your map? And what happens when you don’t plan out where you’re going?
Starting off without a direction can feel exciting, but it can also prevent you from seeing (and doing) everything you want. The same goes for your money. If you don’t have a direction for your money, you may feel like it’s not enough, or that you’re not able to reach your goals. But your money can help you do all those things… it just needs a little direction.
To give your money direction, you’ll need to start by calculating your Net Worth. We share a Net Worth Calculator in our collection of financial planning resources that makes this easy. This will tell you where you’re at with money and you’ll have a better view of where you need to focus your money most.
We recommend doing this at least once a year. It’s an ongoing living document that needs to be updated so your money’s “marching orders” are in line with your current situation.
We all have goals and most of us have them written down. But what if you added a timeline to them? Setting specific dates to your goals kinda creates a script for your life. Instead of planning to reach a goal by some vague date in the future, a Financial Timeline can help you see your plan in action.
To help you flesh out your timeline, there’s a timeline you can use in our Financial Planning Handbook that can be found in our Resource Library!
You might read that and think an investment plan is a financial plan. But it’s not. An investment plan is something you can do without an advisor, and it’s more of an investment goals analysis than anything. It’s not just for retirement investment goals, either. An investment plan is great for investing in a work-optional lifestyle at any age — or for travel, home buying, college savings, etc.
The best way to give your money direction is to give it different jobs. We’ve talked about the “Bucket Strategy” on the blog before, which includes:
Hopefully, this gives you a great launching-off point for your new money “map.” The best part is that you can do these yourself and figure out where you stand… without ever asking for help. To learn more about what each of these buckets mean and how you can direct your money to fill each one, check out this blog post, “Why It’s Important to Know Your Numbers.”
If you want to actually get to know your numbers, join the Know Your Numbers Challenge! With this challenge, you’ll figure out your own personal bucket strategy, including how much to save in each of your “buckets.”
What if you had a clear formula to help you figure out how much to save… while paying down debt and enjoying life? It is possible… when you know your numbers.
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The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by Advisor Launchpad to provide information on a topic that may be of interest. Advisor Launchpad is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.
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