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Your Life Plan Needs a Cash Flow Plan
Where would you like to be 20 years from now? On the
deck of a cruise ship on the Mediterranean? On a trek in the
Andes mountains? Or something simpler, such as spending
time with family and friends at your paid-off home, the
frenzy and pressures of the workplace a distant memory?
“Identifying your vision for the future helps to bring clarity
and focus. That’s one thing many people are lacking,”
says Robin Thompson, M.A., president of Budget Wise
Consulting and WXYZ Channel 7 Money Coach. “Some
people are saving, but they don’t know how much they
need because they haven’t defined where they want to go.
Once you know where you want to be, you can bridge that
gap with where you are right now.”
To get motivated and plan a path to reach your financial
goals, write your goals in a journal or create a vision board.
If you’re married, it might be fun to plan your board with
your spouse.
Then it’s time to create your cash flow plan. How much will
you need to live the life you want?
“Americans’ savings rates have dropped tremendously over
the years,” notes Robin. “These days, the amount people
have in their savings accounts when they retire is minimal.
It’s quite sad when people work all their lives but have very
little to show for their efforts. Do you want to maintain the
same standard of living in retirement
and do the things you enjoy? Starting
sooner can mean the difference
between having to save $500 a month
or $2,000 a month for a comfortable
retirement. The earlier you start the
better, and the less stressful it will be
for you. And to become a great saver,
you need a plan.”
Three Important Reasons to
Start Planning Now
1. Less debt will mean less stress in your life.
2. The earlier you start saving, the less you’ll have to
save each month.
3. If you’re married, it will strengthen your
“If you’re married, sitting down and mapping a cash flow
plan together will engineer a lot of conflicts out of your
relationship,” Robin explains. “Plus, you’ll have joint
accountability. If one spouse is spending without the other
one knowing what they’re doing, it undermines the family’s
finances. If you’re supposed to be a team, you don’t want to
undermine the team’s progress. Look at family finances like
a small business with the goal of growing your net worth
together. You’ll make better decisions as a couple – and you
can share in your victories. Make time for conversations
about money.”
Wise Advice