Money Management Plan - the basics
Have a money management plan with a strategy. Anything is better than nothing at all. It doesn't have to be formal in nature if you can keep it all in your head, but when it comes to money, having a plan is a step in the right direction.
If you wanted to get somewhere, you might use a map. You might know how far it is and you might know how long it will take you. That's a plan.
You might ride a mule, take a train, drive a car or hitch a ride with someone else.
You might use many of these modes of transportation in combination. That’s more like a strategy - how you're going to accomplish your goal.
So, for success with managing your money, you need to know where you're going and how best to get there.
Let's look at what we might have in our plan. Here are the basics from my perspective:
- objectives - home, family, world travel, etc.
- sources of income - job, career, enterprise
- investments to make - education, real estate, stocks, bonds
- anticipated timeline - putting it together
- notable milestones to achieve
- steps to get there - the strategy
It's much easier than it might seem. Having a plan means you know more than simply what you want; you have some idea of how you're going to swing the financial end of things to get what it is you want.
Plan your life deliberately and you will have much greater success than if you don’t. It's just that simple. Don't worry about being able to see into the future. I've never had a "crystal ball" that allowed me to see more than about 5 years down the pike, so I'm not talking about predicting the future - it's just basic planning.
If you want to see examples of people that are not deliberate about their life, just go down to the local labor office and take a look at those individuals who are sitting in the chairs or hanging around outside waiting for someone to call with a need for unskilled labor.
Their lives don’t have much of a plan, and therefore, not much of a future either.
If you have a plan, you'll have a future. It might not unfold the way you want it to, but at least you'll know where you're headed, why you're headed in that direction, and how best to get there.
Even your personal finances need a plan. Things don't fall together by accident, they require thought and effort and "shepherding."
With a money management plan, you can start to see the difference between someone who has dreams, and someone who has a chance of making their dreams come true.
Done with Money Management Plan, back to Mindset of Frugality