Every woman has gone on a diet at one time or another. Much of what we learn from dieting can be applied to a financially healthy lifestyle. Below are statements found on the Weight Watchers website as to why their program is different and successful.
“When you follow the Weight Watchers plan, you get: An integrated approach that combines smarter eating, healthy habits, exercise and a supportive environment. A program that adapts to your lifestyle and particular needs, so you can reach success through a more personalized weight-loss experience.”
These statements can be modified to apply to Financial Planning. When you follow a personalized financial and investing plan you get: An integrated approach that combines smart spending and savings, sound financial habits, investing and a supportive environment that adapts to your lifestyle and particular needs.
Our Seven Keys to Financial Planning and Investing
Step One – Get on the scale. Ugh!
This is equivalent to figuring out where you are financially. How much in debt are you? What are your assets? Is your income outpacing your expenses? What is my effective return rate? Am I saving enough for retirement? Are my investments up to date?
Step two – What is your goal weight?
This question is often not easy to answer. You can look at a weight table, but that doesn’t take into account what number is comfortable for you and your body type. You need to ponder this goal and adjust it as you figure out what fits into your lifestyle and what is comfortable for you. Use the same approach when setting a financial goal. It should be based on your desires (dream home, vacations, early retirement), what is realistic (Ivy League school for the kids versus State colleges), and needs to adjust to your comfort level.
Step three – When do you plan on reaching your goal?
Like dieting, you need to make sure your goals are realistic, adapt to circumstances in your life, and can be reevaluated as you work towards accomplishing them.
Step Four – Tracking what you eat.
We always hate this part! It takes time and commitment. You have to admit that you finish your children’s plates, snack on “only a few” Hershey’s kisses or overindulge on the weekend. When the truth is revealed it isn’t always easy to look at. The same can be said when applied to money. Where did it all go? How much is my Starbucks habit actually costing me? Do I really use all those cable channels? How important are those new shoes – are they really must haves for the season? And of course keeping track of your spending is difficult. (At AMR we have a program called Money Organizer Pro that makes tracking expenses and income easier. As a client you have acess to this great software.)
Step Five – Planning your meals or “BUDGETING”.
Yuck! Who wants to do without? You can think of it as a” glass half empty” or choose the “glass half full”. Making the right choices will bring you closer to your goal. Try new recipes, or buy an espresso machine, then you can say good bye to Starbucks and skip the line. Try a new routine, you may like it better. Log in writing every time you spend cash.
Meals = Fixed expenses like mortgage payments, electric bills and car payments, credit card bills. Things you owe every month are non- negotiable/nondiscretionary.
Snacks = Variable expenses; lattes, dinners out, new sports equipment. You don’t have to come up with a monthly bill and you can adjust these expenditures easily- negotiable/discretionary
Dessert = Vacation, Jewelry, other extravagances. But remember we all need a little dessert in our lives. If you cut out all desserts it makes the diet impossible to maintain.
Step Six – Exercise, or Investing and Saving.
It is hard to get started and isn’t always easy, but saving and investing will help you achieve your goals, as an added bonus, you will have a little in reserve if any unexpected expenses come up. If you exercise enough you may get to have a little extra dessert. You are making your money work harder for you.
Step Seven- A supportive environment.
Tell others about your goals so they can cheer on your successes and help you get back on track. Have a professional help you assess what is working and what isn’t working, and adapt the plan. We would love to help you with your financial health. We have the tools( Money Organizer Pro is a great one) and the experience working with women, at all stages of life, whom we have coached to financial confidence. Today is the right time to start down the road to financial happiness. Give us a call at 508-771-8900.