Monday, January 28, 2013

The Big Girl's Guide to Financial Planning

The Big Girl Chronicles:  The Big Girl’s Guide to Financial Planning

With guilty pleasures such as “retail therapy” and rather expensive taste, I’m the absolute worst person to offer advice on financial planning.  When gainfully employed, I squandered whatever extra money I could get my hands on buying luxury items and enjoying things that are of minimal value now.  Someone shared with me knowledge about interest bearing savings and investments, but I wasn’t disciplined enough (or grown up enough) to heed her advice and do smart things with the money.  Knowing what I know now, I realize that I took too much for granted.  There has been constant mention that social security - which was my entire retirement plan - could be unavailable.  And in times when employment is low, earnings are just enough to make paycheck to paycheck and there is no company retirement to buy into, saving for the future gets put on the backburner.  Unfortunately, an aging generation can’t afford to prolong financial planning.  Here are a few things I plan to do to piece together a financial plan:

Put myself to work.

Whether you are already employed or not, there are several means by which you can generate supplemental income.  There is the obvious part time job that could add a little something extra towards retirement and savings (as much as your tax bracket can stand without penalizing you for earning two dollars too much).  Should there be time constraints or other reasons that make that a less desirable option, you can always go into business for yourself.  Make your hobby work for you.  Ever get called on to do a little work on a car?  How about being handy around the house?  Like to sew?  Whatever it is you do that has people calling on you to do it for them, begin to attach a price tag to your services.  Not feeling exceptionally gifted in any area?  You don’t have to have special talents to earn a little something on the side.  There are businesses such as AVON, Mary Kay and others that require little more than a small start up fee and a social circle to ante up your earning potential.  If you decide you’re really serious about creating multiple streams of income, you can opt to do all of the above.

Create a realistic budget/plan for spending.

Tidying up my budget is a good way to find out where I can shave off some cash to add to my future.  Again, I’m terrible at budgets.  But what I have learned from having tried one once upon a time is that if you create a strict “military” plan you are essentially setting yourself up to fail.  Although focus is on creating a substantial savings, allow yourself some allotment to do delve into whatever temptation (as long as you do so responsibly).  This could also be an opportune time to tackle whatever debt that is robbing you in interest and subtracting from your total earning potential.  Eliminating financed headaches leaves larger amounts to add to your savings.  Another helpful tip is to reevaluate your cellular plan.  Many people are easily paying $100 a month on cell phone plans to equal $1200 a year for the convenience of unlimited texting and cute ringtones and what not.  If you’re not using all of the bells and whistles that you’re paying for, or even if you are, taking a look at what is absolutely necessary and what can be omitted will help put money back into your pockets. 

Decide how much I plan to save.

Working with a specific goal in mind can make you more effective at achieving what you hope for.  Deciding how much I hope to have pocketed by the end of each week, each month, each quarter, annually and so on will help me realize that my efforts aren’t in vain.  Therefore, a projected savings over whatever period of time is an absolute must.  Simultaneously tracking extraneous costs can also be helpful.  As I replace less disciplined spending habits with more responsible choices, I begin to program myself to like “hoarding” cash to my surprise as opposed to making someone else rich. 
Get help from more experienced people.

Have a financial wizard in your family or a friend who has already achieved what you hope to accomplish?  Talk with him or her about what worked for them and apply it in your financial plan.  Research options online for financial institutions and services that can help you decide where to put the money to maximize interest.  Begin to read what the experts have to say.  Popular personalities such as Dave Ramsey and Suze Orman are a couple that have had major success extending their financial wit to those wanting answers (and ends)to their financial dilemmas.  Create your team of professionals to cheer you on!

Pay attention.

I know I don’t have to tell you this.  This goes without saying.  But for the sake of passing along information, hold our political figures and those who are responsible for making choices that directly affect our future accountable.  Where social security benefits are concerned, find out whom to hold responsible and help negotiate more feasible options that don’t penalize those that have paid into the system for the massive misappropriated spending of the government. 

Whew!  Growing up sure is taxing on my brain!  Gone are the days when I could spend, spend, spend without worrying about much more than which outfit I’m going to wear with what pair of shoes.  And to that angel that told me just over ten years ago “You don’t have to spend all that money.  You can take some of that and put it in an interest bearing savings account,” I heard what you were saying.  And if I had listened, it makes my head spin to think about how much I could’ve saved if I had followed your advice.  Ignorance is costly.  But thank you for calling that to my attention.  To whomever is reading this at this moment, don’t be like me.  Begin to take control of your money now, because if you don’t there are certainly a number of finance companies and lenders who are more than happy to mooch off of your future as long as you’ll allow.  Wealth to the wise!

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