 |
Building An
Effective Action Plan
|
|
|
|
|
Creating an effective Action Plan for achieving financial health takes three simple steps.
1. Define What You Value
2. Set Goals for Your Financial Vital Signs
3. Make a To-Do List of small steps to reach your goals.
1. Define What You Value
|
| Most people get into financial trouble, or never reach their financial potential, because they are pursuing goals that compete with each other. For example, |
| |
- An 18-year-old man wants flexibility and freedom, but he borrows money for clothes & entertainment. |
| |
- A 35-year-old woman wants a steady job, but she stays up late and is unable to keep awake at work. |
| |
- A family wants to save for their children's education, but they spend all their money each month. |
|
| Realistically, it's impossible to have it both ways. If you want flexibility and freedom, you should avoid borrowing money to spend on consumables (things that lose their value in a short period of time). If you want a steady job, you should get enough sleep so you can stay awake at work. If you want to save for your kid's education, you can't spend all of your money every month. These people are pursuing competing objectives. |
It's like trying to walk down two different paths at the same time.
It's impossible to do. And when you try, it causes pain. The further down the two paths you try to go, the more it hurts. You won't get anywhere, and eventually, you'll have to choose one or the other. By that time it will still hurt to undo the damage you've done. |
 |
|
|
So you have to decide what is most important in your life. What do you truly value? Once you know where you want to go, getting there is a lot easier. For instance, if you decide that you value a sense of security more than you value the thrill of owning a sports car you can't afford, it will be easier to make wise financial decisions that will really make you happy -- even when you see that sports car on sale. :)
It takes many people a lifetime to figure out that the things they value most -- meaningful relationships, peace, satisfaction with personal choices -- can't be bought with money. Your money should be something you control to create the life you want, a tool to help make your most important dreams come true. Is that how it feels in your life? If not, your money is controlling you, instead of the other way around, and it's time to make a change!
Use the Values Reminder to keep a list of your highest values.
|
| 2. Set Goals for Your Financial Vital Signs |
| We are all motivated by different desires - to get a great education, to retire at age 50, to own your own home, to take your family on an amazing vacation. We find happiness and purpose in achieving goals like these, especially when our dreams are aligned with our highest values.
But it's also easy to have big dreams without understanding the many small steps you MUST take to achieve them. Years of financial counseling have proved to us that people will never achieve their personal financial goals if they don't take the time to get financially healthy first. Very few people ever win the lottery or inherit a fortune. But ANYONE can achieve comfort, security and independence by working hard and developing good financial habits.
The Financial Vital Signs give you an easy way to measure how financially healthy you are now, and to watch as you improve. As your financial health increases, you will be amazed at the results. Many stresses will disappear. Things you once thought were impossible will begin to seem realistic. You will definitely be happier. Most important, you will be free to dream, and free to live your dreams.
Get started by setting goals to improve each of your Financial Vital Signs. Click here to set FVS goals.
|
|
|
| 3. Make a To-Do List |
|
Now it's time to think seriously about what it will take to reach each of your Vital Signs goals.
We often counsel people who set unrealistic goals, like "Get out of debt." Not that getting out of debt is impossible ... but without a step-by-step plan, it's highly unlikely. It's human nature to become overwhelmed by a big task, and to postpone, ignore, and avoid the difficult. If you want to achieve your Vital Signs and life goals, you need to start small. The journey of a thousand miles begins with a single step.
A good way to evaluate your goals is to make sure they're SMART.
|
S
|
pecific |
|
M
|
easurable |
|
A
|
ction-oriented |
|
R
|
ealistic |
|
T
|
ime-bound |
|
| Example: Not SMART goal |
Example: SMART goal |
| "Get out of debt" |
"Put $200 more each month toward car payment,
to pay off car by November" |
|
|
| |
| |
Look at each Financial Vital Signs goal, and make a quick list of things you can do right now to reach it. Type those items into the To-Do List. Start working on the most important things first.
When you have completed the tasks on your list, start another list!
|
| |
|
|