Just the term financial planning process sounds sort of big and complicated, but the reality is that financial planning is really a life planning process.
When you sit down to identify your goals, what do you write? Do you write the end benefits of feelings you want, such as peace or freedom, or do you write a list of things you want, such as a comfortable home or a giant savings account?
Most people write out specific things that they want in their life, knowing that the outcome will be those warm and uplifting feelings that make them happy.
So, the financial planning process starts with defining those things that you want, and then assigning a cost and time frame to those desires.
That’s easy enough…what’s next?
The very next step is to see if you’re on track to have those amounts of money in the chosen time frame. If you are, just by defining and reviewing this process you’ll have more peace and focus.
Look at this next…
If you’re not on track, a temporary roadblock will probably surface in at least 1 of 3 major areas in this totally simplified financial planning process:
- You’re not sure if you’re on track to achieve your goals due to lack of information or focus.
- You have more money going out than coming in every month.
- The money you have is not working to create more wealth for you.
It’s that simple. Of course the financial planning process can touch on other areas, such as insurance or legal issues, but at its’ core, these are the 3 basic areas to focus to grow money.
Have any old money mistakes?…
Since past money mistakes are responsible for many gnarly financial situations it may be tempting to visit past mistakes at this point. The gift of mistakes is the wonderful learning opportunities that they provide.
The trick is to let mistakes go so we don’t stay stuck because then we miss new opportunities that will create positive change.
So focus on now, not what could have been or what was. This allows you to ask “What’s the very next step for me to take today to create the life that I want?”
Of the simplified 3 step financial planning process above, what speaks to you? Sometimes we pretend not to know, but we know deep down inside; we just sometimes lose touch because money stuff can feel really big and scary, so we avoid it. Just return to the 3 basics above, and take the very next step.
And remember, money’s just a tool to create the rich life that you want.