They say that most resolutions fail by February. So why not make a resolution that takes less than a month to accomplish? Instead of dedicating months to getting your financial life in order, just focus on one or two actions that can make a big difference in your life. You can create your one-page plan in a few hours over a weekend and will set you on the right track and motivated to do more.
Why a one-page plan for Financial Success Goals
The biggest reason to build a one-page plan is that you can accomplish it in just a few hours while reaping immediate rewards. It may not be perfect, but it removes any excuse that may prevent you from doing a complete plan. No need to collect tons of data and statements, recover forgotten passwords, or pay a financial planner to do it. The process of making the plan is kind of fun and it provides a sense of accomplishment. So there is really no reason not to do it. If you believe that financial planning is boring and by the numbers, we are here to change that.
What it looks like to Plan my Financial Success in Austin TX
Take a piece of stock paper, divide it into three areas, and write as headers, from left to right: Values, Goals, Actions, like this.
The idea of the simple plan is to start changing your mindset, from just “going through” life to “having a strategy” to make the most of your resources. Your actions have the purpose of getting you closer to your goals, and your goals are meaningful because they are aligned with your values and priorities.
Start with Values
Values are the intangible things you care about, they are the WHY of your plan. Why is money important to you? If you are reading about planning you probably have a money question that’s been bothering you. So why start with values, you may ask. Because values provide the emotional payoff that’s required to take action, monitor progress, and ultimately achieve your goals. Say you solved that bugging money question, what difference would that bring in your life? That’s a value question.
Values typically involve a sense of security and independence, improved relationships, learning, and self-improvement, finding meaning, balance, or becoming everything you can be. They are formulated in practice with statements such as time with family and friends, achieving career goals and social success, giving back, running your own business, etc. Take time to reflect on why money is important to you, maybe with a trusted friend or a partner. Write your values down on sticky notes and place them in the Values column.
Set meaningful goals
Goals are measurable objectives that require planning to achieve. They are the WHAT of your plan. Start from your list of values, and ask: what measurable result(s) will help me fulfill my values? Make an effort to write goals that are specific, measurable, and realistic. A realistic goal is both challenging and achievable. A goal won’t bring satisfaction if it’s too easy while you are more likely to give up on it if it’s too hard.
At this stage, however, don’t worry too much about having perfect goals. Just make a list. Goals always have a dollar amount and a time horizon, like start a safety net this year, save $40K in the next two years for a down payment on our first home, save $70k in 5-7 years to start my own business, retire at age 60 with $75K in sustainable income, and so on. Take a look at this guide for additional help refining your goals. Once you have a list, prioritize them in terms of importance, and focus on the top three goals. Make sure they are aligned with your values.
Actions are next
Start with this simple question: “What can I do, starting today, that will get me closer to my goals?” And write down the answer. Don’t worry about big or small for now. Remember that most often in life, big things are accomplished with many small steps. The key here is to list actions that will get you started. Repeat the question and answer as long as you want. Consider the three examples below, or browse through our Christmas list to get some more ideas.
Get a clear picture of where you are
Here is something most of us need: getting organized. Getting your financial house in order has great advantages, including an inventory of all the things you own and of everything you owe. The difference between the two is your financial net worth. The net worth tells you where you are financially and helps you measure your progress towards your life goals, and is a useful signal to develop good savings habits and adjust your goals and priorities. Use our complimentary tool and go through our 4-step approach to get financially organized.
Give budgeting a try
Financial security starts from being aware of your resources, and how to use them efficiently. This is what budgeting does, it creates awareness about how you use your resources, and highlights your financial strengths and weaknesses. Think of it this way: Your goals tell you where you want to go, your net worth tells you where you are, and your budget helps you chart the path to get to your goal. There has to be alignment between these three, or chances are you won’t reach your goals.
We have created a simple way to get started with budgeting, without actually creating one, and a guide with simple steps to create your first budget.
Review your investments
Think of your investments as the engine that will help you grow your wealth and achieve your financial goals. So it’s important for your investments to be in sync with your goals. Start by listing your goals and priorities, then go through our key questions to develop your investment guidelines.
Put it together
That’s it, you have your first financial plan! Here is what it may look like at the end of the process.
Source: DESMO Wealth Advisors, LLC
Yours may look completely different. You may need to review your insurance coverage, make a will or other estate planning documents, or buy a boat to travel the world. All these are OK, as long as there is consistency between values, goals, and actions.
Where to go next, Contact a Financial Advisor in Austin TX, Desmo Wealth Advisors LLC
If you followed the steps, think about what you accomplished. You started with a problem or a need that was bugging you. The plan now has helped you put the issue in the right perspective and clarified why it was bugging you. You have made a good effort at identifying a list of goals that will help you achieve your life aspirations, and a set of actions that you can work on. Isn’t that great? What else do you expect from a plan?
You may not have all the answers, but you got started, and that’s a big step. You may use the momentum to work on your actions on your own or ask for help from a trusted advisor at any step in the process. Once you completed your actions, review and revise your plan as your life changes. By repeating this simple process, you take small steps towards something big.
Until Next Time!
Massi De Santis is an Austin, TX fee-only financial planner and founder of DESMO Wealth Advisors, LLChttps://desmowealth.com/. DESMO Wealth Advisors, LLC provides objective financial planning and investment management to help clients organize, grow, and protect their resources throughout their lives. As a fee-only, fiduciary, and independent financial advisor, Massi De Santis is never paid a commission of any kind, and has a legal obligation to provide unbiased and trustworthy financial advice.
