What does a plan look like you say? We use the word budget, financial plan and spending plans interchangeably. But a good financial plan brings a family onto the same page. You would never run a company or a sports team or a civic organization without a plan and yet we run our family finances without a plan all the time and our families are suffering as a result. A recent Gallup poll said that 1 in 3 have a working budget. That means that two-thirds of us are just winging it. Here are some other characteristics of a good financial plan:
- A Good Plan identifies where the family is going to spend the money they make. In later articles, we will give you some percentages to guide you into developing a holistic spending plan.
- A Good Plan identifies what a family is going to give away. Generosity is a very important way to combat the consumptive lifestyles that many of us live. It truly is better to give than to receive.
- A Good Plan identifies what the family is going to save (short term, mid term and long term). The wise man will have resources to draw from when times get tight and attend to the needs of his family tomorrow as well as today.
- A Good Plan freezes and eliminates debt from the budget. The borrower is the lender’s slave and debt must be managed in order to get ahead.
- A Good Plan makes sure that the family has the right protections in place (insurance, will, etc). The people and things you manage need to be protected. Insurance and estate planning can make sure that your assets are protected in the event that you experience hardship.
We are going to be speaking to each of these topics in subsequent posts. Check back in with us. The wonderful life you are hoping for financially may be a little closer than you think. But you need a plan!!!