Ray’s Take: Training to run a marathon and creating a financial plan have a lot in common if you’re going to succeed. An overall plan includes short-term and long-term goals and the ability to stick to the plan through thick and thin. No pain, no gain. Right? And that applies to money as well as running.
It can be a painstaking process to go through and determine exactly how much you spend and where it’s going. Where can you cut those expenses? Dig deep to find those expenses and get them in the picture of your plan. It can sometimes require both a financial planner and a marriage counselor.
Plugging small leaks may seem tedious, but cumulatively can take you a good bit of the distance. They can be an invisible drain on your money if you’re not making sure you’re aware of them. Take the time to talk to your financial planner to discover the management fees for all of your accounts. Know your banking fees too. All these little expenses can add up over time. There should be no sacred cows in the process either. Everything must be on the table.
Once you have all this detailed information at your fingertips, you can create a better and clearer picture of how you’re going to reach your goal. This leads to another aspect of the marathon – the decision to hold fast to the plan in times of market turmoil and the decision to reallocate in an upward trending market because that’s the step to take to remain on track.
There will be times along the way when you have doubts or stumble. There are times when life happens, and you have to adjust the plan. Staying strong and in the race will be worth it in the end. It doesn’t do any good to quit. You aren’t the only one who has struggled.
These can be time-consuming and difficult tasks and decisions. But if you’ve done them and seen the payoff, you understand that doing hard things financially is often good for you and gets you where you want to be.
Dana’s Take: A healthy mind and body lead to clearer thinking and better financial decisions. And the steps of training your body can be applied equally well to creating healthy finances.
Step one: Have a clear mental picture of why you are doing these things and what you hope to achieve from them. Is buying things you don’t need from that specialty store a priority, or is saving for your family’s future a priority? What is important to you?
It can be very motivating to have concrete short- and long-term goals and rituals in place. Get expert advice. Use discipline. Create a plan.