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.

Don’t forget to checkout our website, www.MyFinancialLifeCoach.net  for 100’s of resources including tips, articles, spreadsheets, web-based training, and more.  Why not tell a friend? Looking for daily motivation on your financial walk? Checkout the My Financial Life Coach Facebook page.

Advertisements

3 Comments

Filed under Budget, Children, Family, Finance, household budget, Money, Personal Finance, Saving Money

3 responses to “Create your spending plan– maximize your income

  1. John: Per your other message please email me more details via info@myfinanciallifecoach.net.

    Thanks

  2. Hey Bryan. I like how you highlighted the importance of managing today’s income as well as income people will earn down the road. It’s really amazing how much money we need to manage in our lifetimes! Shoot me an email sometime and I’d love to discuss some opportunities with you! God bless!

    • Thanks John.

      By nature I’m a big picture person so the first thing I do when I work with clients are to help them spell out their financial and money goals ( 5). Many have never done this before.

      Then when we get calculating how much income they will bring in before they retire they realize that the money is finite and they must prioritize their goals if they what to accomplish the important things in life. I

      Have a great day.

      Bryan

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s