Planning Your Financial FutureIf you have a plan for your vacation, why don’t you have a plan for the next decade of your life? Really!

Sit down, and carefully decide where you are going, what you are going to do when you get there and how you are going to pay for it. It is as simple as that. And it is called A Financial Plan.

Yup. That plan has that nasty multi-syllabic word that many of us women don’t like—financial. But don’t be intimidated by that word. After all, you are older and wiser now.

Take the plunge. Sit down with a glass of wine or your favorite elixir. And decide what is really important to you. What brings you the most joy and the most contentment, the kind you get on vacations or in other areas of your life? Your relationships with the ones you love? Your proficiency in some arts or crafts?  Engaging in a sport of some type? Is it dinner with your best friends, or even coffee? Is it showing off your recent project? Is it playing with your grandchildren? (ooh I am jealous because I don’t have any of my own). Is it playing with your partner, when the lights are low?

Step 1. Write a long list of your Favorite things. Finish your favorite elixir and then budget an hour of time tomorrow to go over that list.

Step 2. Tomorrow, pick the top 2 (or maybe 3) Favorites—the ones that really give you a feeling of fulfillment and joy.  Then develop a plan to make those two gratifying goals the center of your life—for the next decade.

Like a vacation, you know where you are going, so figure out how you are going to get there, etc. But this vacation lasts a lot longer, ten years.

Is this too abstract? Ok, let’s give you an example. Let’s guess you get great pleasure from your relationships, that is, the time you spend with your best friends and/or your partner or your grandchildren (of your lover—if you have the chance for a torrid affair). Then list the activities that you want to do to make sure these people remain at the center of your world. Do you want to make sure that you and ______ (fill in the blank) meet once a week (or talk once a day)? Do you want to plan special events that you can share with __________, like dinner parties holiday meals, or long weekends devoted to each other, etc. Do you want to buy gifts for ______ or fund college for ___________ List them all.

Step 3. Then figure out how much it will cost to do these things. In other words, put a price tag on each event or get together. Then add it all up, so you budget for the year. If the budget looks too high, eliminate the costly things and stick with reunions that maximize your mutual gratification, but minimize the cost. Add the dollars up again and see what it will cost to do just what is really important to you. It might not be too much money.

It is crucial to make your most fulfilling, pleasurable activities the center of your life and your spending. Then you don’t get side-tracked by impulse spending. You focus you attention, your precious time and money on what you really want. Then you take action to make sure you get it. In short, you are making sure your money is spent primarily on you and your contentment.

Step 4. Now, just before you put this plan in action, take a reality test. Find out how much it costs you to eat, pay for the roof over your head, the cell phones and cable, the clothes on your back, the car in your driveway, etc. Don’t forget your car insurance, or mortgage or haircuts and beauty treatments and credit card costs, etc.  You can make your own list, or you can go to my site to the TRACK IT to get some low tech and high tech approaches to get this done.

Step 5. Add up all of these expenses. Find out four things

  1. What is your “number” or how much do you pay out of your take home pay each month?
  2. How much are you spending on the two things that are most important to you, the things or activities that give you the most gratification,  your Favorites?
  3. Which spending should you maintain and which should you cut so that your Favorites are at the center of your spending and your life?
  4. What do you need to do to make sure that your Favorites are front and center, and the other “stuff” is pushed away, or “deleted” from your life?

Step 6. Develop a PLAN for the  next decade so that your Favorites—the activities and people that bring you the most enjoyment consume most of your time and your money. Develop a Plan for the next decade. List your favorite activities on a time line. Then develop a Spending Plan for the next ten years so that you will be able to feel the joy of experiencing your favorites, while paying for the rest of your life’s daily expenses.

Step 7. Write down your Plan. Commit to paper (or a digital file). Why? Studies show that people are more likely to implement their plan if they write it down.

Step 8. Put your Plan into action. So your next decade is filled with the people and activities that give you the most joy and laughter. Now that is what I call a great Financial Plan.

Wendy Weiss, MBA. Ph.D. is the author of Hot Flash Financial : It is never too late to be create a financially secure future.

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