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Financial Planning: How to Begin

Financial Planning: How to Begin

Have you ever been bogged down with so much information that you have no idea where to start? I know I have. When it comes to finances, this issue happens very easily and quite often. The key is to just start.

First, start by doing a quick scan of possible priorities. From your list of possible priorities, pick just one to focus your attention on. Our last blog revolved around budgeting - you can use this as a great starting point. Simplicity is king when it comes to anything that we do. The only way to make something complex into something simple is by focusing on one thing at a time. This helps us build positive momentum; gets us moving in the right direction. Pick the most important goal and focus exclusively on that. Try not to be quick to rush to the next goal on the list, either. It is essential to spend adequate time building a solid foundation before moving forward.

Once the foundation is solid, select your next main focus. This second focus should be something that builds on top of the previous focus; you laid your foundation, now time to start building up. An example would be saving for something, like a new car. Considering the budget, you would try to figure out how you would begin to save for the new car. After completing this task you would then pick your third priority. Rinse and then repeat.

The beauty of all this is that we are breaking down a complex situation into bite sized chunks (aka small wins). We will all too often set goals that are too big to begin with, and quickly burn out or overwhelm ourselves. Bite sized chunks allow us to successfully finish a big meal, so to speak. If we try to cram too much food into our mouth at once, our jaw quickly fatigues. Finishing the delicious meal is now a challenge rather than an enjoyable experience. This may seem to be a silly example, but it is very simple to understand.

Lastly, challenges will arise… and you will fail. If failure never occurs, it suggests that you were never trying, and probably means that you will have ultimately learned nothing. It is important to understand how vital personal ownership is during this process. Having an excuse as to why the failure occurred does not qualify as personal ownership. An example is, “My car broke down and we had to pay $1,000 to get it fixed.” Most likely, your car breaking down was not your fault. However, we all understand that cars are going to break down on occasion. Therefore, not planning appropriately for the inevitable break might, in fact, be your responsibility. Taking ownership and finding personal fault is important for many reasons and in many aspects. Most importantly, it allows you to learn, grow, and focus on what can be controlled. If you only focus on what can be controlled, then your worries are greatly reduced.

Simplicity and clarity will lead to success. So just begin, and let us know if you need any additional help.