Crafting a Financial Plan You’ll Stick With

There was a point in my life when I decided that I really wanted to get serious about my finances. I grew up with a healthy respect for money and avoiding debt, but it wasn’t something I felt like I had mastered.

I read a few personal finance blogs and even dabbled in creating a budget, but it didn’t last.

What I didn’t realize at the time is that you need to find an approach that works with your personality and the natural rhythms of your life.

If you don’t enjoy the process, or if the advice feels unnatural for your values, hobbies, or preferences, you’ll simply keep reverting back to the way you used to do things.

It’s important that you stick with your financial plan for years, if you want to see results. And it’s important that these plans include a good dose of fun along the way, so that you don’t get burnt out, and lose track of what you’re actually trying to achieve.

With that in mind, I’d like to share a few tips that you might try if you’re looking to craft a financial plan that you can stick with.

Try them out, see what works for you, and enjoy the process.

Decide What You Want

One of the most powerful things you can do in life is to have a very clear picture of what you want.

You might think you know what you want, but if you haven’t written this down, or come up with a plan to achieve it, then chances are, it isn’t clear enough.

In my own life, I’ve seen how deciding what I want with crystal-clear vision, and repeating that vision to myself on a regular basis, acts as an automatic filter that makes decision making easier.

Things that will help you towards that goal suddenly look more interesting, and everything else can go on the backburner.

Start Paying Closer Attention

In order to make the most of my money, I realized that I needed to be more aware of how I was spending my money, and what my biggest expenses were.

Too many of us operate on autopilot when it comes to spending, using our current account balance as our only source of feedback.

I don’t think you need to have a detailed budget for every dollar, but you will want to have a general idea of where your money is going each month, and how much you’re saving.

Cultivate Frugality

Frugality is an amazing habit that you can add to your life. But some people look down on the idea, as if saving money means missing out on the best things in life.

Let me tell you, it’s possible to be frugal in all sorts of ways, and some of them don’t involve sacrifice at all. One of my favorite ways to spend time is reading a book, going for a walk with my wife, or having good taste in coffee with friends.

These interest costs very little, and bring me enormous pleasure. You can have the exact opposite experience too, spending a lot of money on a fancy vacation, but the travel and logistics might be a headache, and the stress might ruin the experience.

My point is that you should think about spending money to maximize your happiness, not necessarily status or luxury.

Grow Your Investments

It’s not enough to be frugal with your money if you aren’t going to do anything with it. Inflation is a real force in our economy, and it will eat away at your savings if it’s not put to good use.

This means doing something that many people don’t like to do, and that’s thinking about investments. Even if you don’t make a plan, and just dump your money into a total stock market index fund, you should be thinking about the money you save and where you should put it.

This might mean paying off a high interest loan, investing in your business or career, or finding a real estate investment that has the potential for steady cash flow. Just don’t allow your money to shrink because you don’t like thinking about this stuff.

Strategically Cut Expenses

As you pay closer attention to the way you spend your money, you’re going to notice patterns, and a few surprises that you didn’t realize.

For example, last summer, when I was looking through my past month’s spending, I became aware of just how many times we had eaten out. My wife and I agreed that this was something we wanted to be intentional about, rather than accidentally splurging.

It might sound like I’m advocating for giving up fun things, or being super strict about your budget, but what I’m actually recommending is becoming intentional with your money.

We decided that we would only eat out on dates or with friends, and try to eat at home when it was just our family. This became part of our fun and our spontaneity, rather than something we did simply out of convenience.

Turn Saving Into a Game

I love to think of saving money as a game. This is really important if you are like me, and don’t particularly like to track your time and expenses all that closely. The idea is to find the least amount of effort that you need to stay on track, and then stick with that plan.

For me, that looks like logging into my bank account once in a while, and seeing a ballpark figure of what we spent. It also means making mental notes when our spending seems too high, or when we are spending money on something that doesn’t add value.

This might seem like an overly simplistic view of how to manage money, but it works for me, and that’s all that matters. It’s a plan that I could stick with, and never feel stressed about.

Everyone needs to find a plan that is sustainable for the long run, because saving money for retirement is not a short term effort.