Emilee Speaks: financial planning series [part 2]

Wednesday, July 31, 2013

financial planning series [part 2]



I am in no way a college educated professional financial planner, but I think I'm about as self-taught educated as a person can get!  :)  You can be too.  While we're on the subject of self-educating ourselves to become financially serene, I have a tip for you.  You DO NOT need to purchase 100 different books on budgeting from people who make millions of dollars selling those books.  There is a wealth of knoweledge already provided for you on the internet.  If you want to know what "Mr. Money Advice Man" suggest for budgeting, google it!  I guarantee you there is a million blogs, articles, and forums that have leaked all the good points in his book.  I will be honest when I tell you, I've never read one of those Best Selling money guru's books.  We're smart women... we know deep down what we need to do to make our household budget work for us.  We're just scared, lazy, or frustrated.  Don't be!  It's not hard, and the reward is worth it.  

Today I want you to gather all your bills, pay check stubs, and bank statements.  [Don't be scared]  Get familiar with what you have coming in, and going out.  Look at what you need to cut.  Listen, I'm all about having a good time & enjoying life.  If you want that Starbucks, have it!  Just make sure to budget in how much you actually can afford.  If you have more bills than income... you cannot afford Starbucks.  [But that's a whole other post.]  How many vices do you have?  Do you need ALL of them?  If you're buying Starbucks in the morning, Subway for lunch, vending machine at work for a snack, ordering pizza for the family for dinner cause you didn't meal plan... we've got a problem.  So get all your financial statements, some highlighters [I'm a major color coder, so you will see me advise using highlighters often], and a pen & paper, and a calculator, cause we're going to dissect!

Dissecting your finances:
We're going to start small.  I want you to take last months bank statement.  Grab a green highlighter, and I want you to highlight all income.  Total it up and write it on your piece of paper.  Once you're done, just look at it for a moment.  Think about how hard you worked for that money.  How many transactions do you have that are money spent, in comparason to your income?  A lot?  Look at how quick you were to waste that hard earned money.  I like to look at everything in how much I had to work to pay for each item.  Let's say you make $10 an hour.  Remember that Starbucks trip?  You ordered your Venti Carmel Macchiato and then also decided to tack on a muffin for breakfast.  Your total will be with tax, nearly a full hours worth of hard work.  As you go through your statement, I want you to highlight in pink all the purchases that were made that you regret.  [Don't be hard on yourself, we all have them.]  Total those up and add them to your piece of paper under your income total.  Grab a blue highlighter now, and we're going to highlight all our "bills".  This will be mortgage/rent, utilities, phones, cable, internet, car payments, insurance, etc.  Add up that total and write it down underneath your "regret" number.  Let's stop and subtract those 2 from our total income.  Where does that leave you?  Are you already in the hole?  Do you have tons leftover [if so, what're you doing reading this? haha!]  

I want you to think about what you're looking at.  Are you content with your money spending?  Are you ashamed?  Figure out where you stand financially.  Is there some adjustments that need to be made?  If there are keep following this series.  I have tons of advice on frugal living, without feeling like you're deprived.  

Let's cover what we've done so far.  We've created our financially serene workspace in part 1, and now in part 2 we've dissected and assessed our finances.  Give yourself a pat on the back!  We're making progress!




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