Picture this, there are 10 seconds left in the game and your team is down by 2 points. You have the ball and you’re rushing down the court with the win in sight. You take the shot. Good news is you’ve planned and practiced for this exact moment; the moment when you make the winning basket and secure the title for your team. The key here is that you planned. You knew what you wanted, and you planned and practiced to get there.
This proves true for any situation you dive into, even your financial game. Simply knowing what you want in life is only the first step. To reach what you want, you need a written plan to set yourself up for the win. A financial action plan directs how you will manage your money in order to achieve what you want most. This plan should be filled with clear goals, actionable steps and measurements so you can evaluate your progress.
Creating a Winning Financial Action Plan
What do you want this plan to help you achieve? Every great plan starts with setting goals and identifying what you want most. Physically write down a list of your goals and wishes so you have clarity on where you’re headed.
2. Financial Data & Status
Gather your financial data including your income, insurance, investments, savings, work benefits and any other data relevant to your goals. Then assess your current financial situation using financial statements and calculations like finding your net worth (assets minus liabilities).
3. Developing the Plan
Set a simple task or action list identifying what steps you need to take to achieve your goals. Your list should include recommended savings, investments or other means of generating wealth. For example, if your goal is to save up $1000 for a different car in the next 10 months, your list should include tasks like making a budget, cutting out unnecessary expenses to save each month and maybe even taking on a part-time job. This will be the most extensive part of your plan.
4. Plan Execution
It’s time to carry out your plan. Do the tasks, cross each off as it’s completed and stick with it. A plan is only as successful as you make it.
5. Monitoring & Evaluation
You need to evaluate your progress throughout the plan. Create checkpoints, set calendar reminders or find a goal-oriented app or program to help you monitor. Do what works best for you. Hold yourself accountable for reaching each step and if you find something isn’t working, then take the necessary actions to set you on the winning path.
Whether aiming for the national title or planning to buy your first house, you need an action plan to be successful. Keep in mind, though, reaching your goals and solving financial problems takes time and effort; but if you start an action plan now, you’ll have resources and practice to succeed.