A financial plan is your map to get from where you are to where you want to be with your money. It’s the process of setting goals and thinking through the steps it will take you to reach them. Remember that each individual person who has a financial plan is different, depending on their short-term and long-term financial goals. It’s unique like a thumbprint.
Honestly no matter what your goals look like, it’s important to think about where you want to be in the near future. You then want to figure out how you can get there. That’s why you need to create a solid financial plan that’s easy to interpret for yourself. Don’t just have someone write you a financial plan. Make sure you interpret it word for word so you can follow your progress pressing into the future.
A Financial Plan That Works For You
Three are many self-help books and thousands of new ways to do a budget on the market today. It’s so much that many people put the details of working on their financial plan for the future off until tomorrow. Unfortunately that future day never comes. You can trust that we’re here to work through all the self-help clutter you can get bombarded with. TV ads and internet attention grabbers to name the biggest. We are genuinely interested in helping you and your family make a financial plan that will work for you and your family.
The 7 Tips Reminder List
Many people have fought their way out of debt and bankruptcy using this exact plan! Whether you’re trying to save money for retirement, invest, or pay off debt with a sound and proven plan that actually works, you’ll find out how to do it with these 7 tips that are easy to remember.
Step 1: Save $1,000 in a Starter Emergency Fund
Step 2: Get Out of Debt Using the Debt Snowball
Step 3: Save 3 to 6 Months of Expenses in an Emergency Fund
Step 4: Invest 15% of Your Income for Your Retirement Fund
Step 5: Save for Your Children’s Education
Step 6: Pay Off Your Primary Mortgage
Step 7: Build Wealth and Give. This will energize you!
Saving for Emergencies
This is expanding on Step 1 which is crucial for when unexpected life events happen. We all know when bad luck strikes. It has away of showing up when we least expect it. It’s never welcome and it’s usually not free.
I’ve had the A/C unit go out during the hottest week of the summer. I’ve had our pipes burst while you’re on vacation. There’s nothing to do but fork over the cash to fix it. But instead of letting your credit card cover it with interest (and making payments for the next two years), what if you could pay for it with cash as soon as it’s fixed? That’s why you need an emergency fund. You may have one and that’s great. If you don’t call it the Starter Emergency Fund and put it in a separate account other than your main checking.
How to Pay Off Debt
If you’ve spent even three minutes reading the Rejuvenotes website, you’ve probably read our tagline of Recharge Your Wallet. That we’re pretty serious about helping people remove all outstanding debt. We’ve said it before, and I’ll say it again: Debt takes your energy away and we don’t want you to waste even one more dollar or any more time on your past when you could be planning for your future.
That’s where the snowball debt removal process comes in. It’s the best way to remove debt from your life. We aren’t just saying that. Here’s how it works:
Step 1: List your debts in a column starting at the top of the page from smallest to largest, regardless of their interest rate. Pay no more than the minimum payments on everything except the little one.
Step 2: Focus to pay off the smallest debt with a everything you have. Once that debt is gone, take that payment along with any extra you can scrape up, and apply it to the second-smallest debt. Again continue to make minimum payments on the rest.
Step 3: Once that second debt is gone, take that payment amount and apply it to the next-smallest debt. The more you pay off. If you can add a tiny bit more great. Don’t try to overstretch though. Just commit yourself to at least the amount you were paying monthly on debt two as an extra payment monthly to debt three on your list. As you see that freed-up money grows and gets thrown onto the next debt. That’s why we say it’s like a snowball rolling down the side of a hill.
Step 4: Repeat this sequence until you’re completely debt-free!
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Financial Advice Your Grandma Would Give You
Grandma didn’t believe in myths when it came to money. Sadly, most of us have accepted money myths from sneaky marketing tactics and use them as a base standard for making our financial decisions. Some we just grew up with because of the ease of getting credit, and others are societal norms we’ve linked to because we saw others doing them.
Myth: That your credit score is the only way you can show how great you are at managing money.
Truth: Bankers, car dealers, and some mortgage lenders have told people for many years to build your credit and have a high credit score. You’ve heard it. I used to run peoples credit when I was a licensed mortgage consultant. I’ve seen it all. Lows of 500’s to up to 840. Your personal FICO score is not a score that says you are winning with your money or that you have a millions in savings; it actually says you are in DEBT.
Myth: Having a credit card will help you build wealth.
Truth: It’s a way to build your credit score if you pay your minimum payment every month and charge it up to 30% of it’s max and hold it there. I’ve heard all the stories out there to draw people that don’t know what I’m saying here into their sticky web like a spider lures it’s insects. Here is your simple and direct truth. Broke people use credit cards. Rich people do not.
People Are Doing This And So Can You
There are thousands of stories from incredible people just like you who decided to make their financial plan and chipped away at mountains of debt. They paid off their homes in record time and are on the path to becoming everyday millionaires. Read the book The Millionaire Next Door if you haven’t. Great read and refer to it once per year.
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