Broke-Ass Student

To move forward in your quest for wealth, you need to establish a clear financial picture

Is one of your aspirations to have complete control and power over your finances? Are you ready to reign in frivolous spending and not allow hard earned money to continuously be sucked into a spiraling black abyss?

Here is a small but effective strategy to guide you toward – and keep you firmly planted on – the prosperous road to abundant wealth.

Create a Financial Action Plan, Write Your Personal Goals

In order to move forward, you must first develop a very clear and concise picture of your finances. Why not take a moment to physically write out your personal goals? (Yes, I mean really do it, Lazy One.) This is a powerful financial strategy which allows you to determine precisely where you’d like your money to go, regardless of income size.

Begin by separating your financial snapshot into three distinct categories;

¤ Your Necessities

¤ Things You Enjoy

¤ Things Which Are Important To You

• Your Necessities are monthly expenses which can’t necessarily be cut back on, such as shelter (mortgage or rent payments, electricity bill, etc), food, clothing and transportation expenses (the cost of a vehicle and maintenance, gas, car insurance). But be honest with yourself on this part while distinguishing what is actually a pertinent necessity. For example, a car may seem so, but a brand new one would fit more appropriately in the category below.

• Things You Enjoy includes your personal interests and hobbies. These are fun activities and items which bring enhancement and fulfillment into your life, such as traveling, gourmet cooking, musical endeavors, sports, gardening, collectibles, movies/entertainment, racing cars, etc.

• Things Which Are Important usually require discipline and wise financial foresight, such as tucking away a cash savings cushion, various retirement investments, a college tuition fund, having life or home insurance, etc.

Now take a moment to consider your ambitions. Financially, what would you like to accomplish in three months, six months, a year, or even five to ten years and beyond? These general goals may include:

• Investing in a Roth IRA or contributing to a 401(k)
• Aggressively eliminating credit card debt
• Contributing to a charity or spiritual institution
• Saving for an exotic trip around the world
• Paying off student loans
• Purchasing a car or home
• Establishing a cash safety cushion
• Investing in additional real estate
• Starting your own business venture

Once you have an accurate overview of what your ambitions are, start formulating a detailed plan on how to accomplish them. (”I’d like to take a summer trip to Copenhagen, therefore I will contribute $50 a month for xx amount of months, while meeting with travel agents to compare discount flight rates and accomodation options.”) 

Here is a quick rundown of my personal snapshot.

Necessity - Sufficient funds are set aside every month to cover these expenses, which include food, shelter, clothing and transportation expenses.

Things I Enjoy - traveling, a yearly gym membership, funds for movie/theatre/entertainment purposes, playing my piano, and eventually saving for a Lasik eye surgery procedure.

Important Items - Funding a Roth IRA and establishing a plump cash savings cushion for emergencies.

From this overview, I can immediately glimpse where I’d like to allocate money and decide what portion of each paycheck to devote toward each item, and what may need to be sacrificed. I’m also able to clearly calculate how to productively contribute to more than one endeavor while simultaneously working toward many or all goals at the same time.

Visually I’ve created a clear financial action plan for each aspiration, which is a powerful gesture in prioritizing and transforming these goals into reality. By taking a moment to physically write down each of these personal financial goals, I’ve been given clarity, purpose and structure within my limited income stream.

Do you know what your current personal financial snapshot looks like?

1. Get power and control over your finances and reign in frivolous spending
2. Stop living paycheck to paycheck
3. Learn how to save and plan for future goals and dreams
4. Avoid becoming entrapped in unnecessary debt; learn how to live like a lender instead of a borrower

~†~ Baby Steps Are Key ~†~ Create a written action plan to give purpose, structure and specificity to your personal financial dreams

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Sayings of the Wise 

“Great estates may venture more, but little boats should keep near shore.” Benjamin Franklin

“Just as the rich rule the poor, so the borrower is servant to the lender.” Proverbs 22:7

“Dost thou love life, then do not squander time, for that’s the stuff life is made of.” Benjamin Franklin

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