Create your spending plan– maximize your income

Less than half of adults (42%) keep close track of their spending.

                                          National Foundation for Credit Counseling (NFCC) – April 28, 2009

What happens when you go into the store hungry? That’s right . . . you buy more.  The same thing happens if you don’t have a spending plan. You buy more because nothing is spelled out. So what will a spending plan do for you? A written plan will help you to avoid overspending.

You have a lot of resources to manage.

Take your current yearly household net income (left column) and multiply by the number of years to determine your income during that time period. Below is an example of someone who had an annual income of $70,000. Note that this example does not figure in any type of pay increase over the next 30 years.

Example . . .

_70,000______  x  10 years  =  __700,000_______

_70,000______  x  20 years  =  __1,400,000______

_70,000______  x  30 years  =  __2,100,000______

Now, go ahead and calculate this for your income.

____________  x  10 years  =  ________________

____________  x  20 years  =  ________________

____________  x  30 years  =  ________________

Wow!!  You have a lot of money to manage.

Have you ever thought about this before? In the example above this individual will be managing $2,100,000. Let’s put that into perspective. If he was going to build a $210,000 house he would have to have a survey, building plans, permits, and many inspectors & inspections to manage this $210,000 project. If that much planning is needed for a $210,000 house, how much more planning should be done on a project (your financial life) that is ten times larger?

Take a few minutes and think about your finances. The last time you received your W-2 did you ask yourself “where did all of the money go?” It is time to start putting a plan together if you don’t have one. If you have one please take the time to review it. One more thing…a plan is worthless if no action is taken on it so get out there and take some action this week.

You have a choice, and the choice is yours. – Coach Bryan

Thank you for reading the My Financial Life Coach blog where we talk about money, goals, family, life events, spending, and economic news. We do make every attempt to avoid the topic of politics but we will bring up economic policies that need communicated. Our job is to educate and motivate you to the debt-free life style.

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