10 Steps to Financial Success

There is a lot you can do to better utilize your money and establish you family's financial expectations, the 10 easy steps below will help you and your whole family work to achieve the financial goals that you establish together.

Before we get started, think of your financial planning in 3 stages: tactical, operational, and strategic

• tactical or short term - how do I pay the bills and spend my money today (as an individual)?
• operational or mid term - how do I continue to pay my bills, enjoy life, and reach my strategic/long term goals
• strategic or long term - where do I/We want to be financially in the future?  Where is "the future"? (5 years, 10 years, retirement)

If you hate talking about the household budget, you are not alone BUT the 10 easy steps below will reduce budget stress and may just make it FUN to Make the [positive] Change your family and finances need!!

10 Steps to Financial Success
1. Decide WHO should participate in the money conversation.  Who influences how you and your your family spends their money?  Get those people together in a room, preferably in person.

2.  Ask each person to individually write down their NEEDS and the needs they see for the family and an estimate for what each costs.
ie - food/water/debt/taxes/utilities/child support/rent/education/savings/transportation

3.   Ask each person to individually write down their WANTS and an estimate for what each costs.
ie - vacation/new car/presents/daily coffee shop stop/donations/designer purse

4. Combine the NEED lists and WANT lists separately  - combine and eliminate duplicates - tally up each category to give you a TOTAL NEED estimate and a TOTAL WANT estimate.

5. Discover the actual INCOME.  The GRAND TOTAL is the total of all money coming in, ie - jobs, retirement, alamony, child support, investments.  

6. Subtract the TOTAL NEED from the GRAND TOTAL = DISPOSABLE INCOME
      If you do not have enough income to cover the TOTAL NEED, then some serious soul searching is needed from the whole family.  Are our needs really needs?  How do we earn more money to meet our needs?

7.  Subtract TOTAL WANT from the DISPOSABLE INCOME
     If you can cover all your wants with your DISPOSABLE INCOME, then you are in primo shape.  If not, discuss with your family which wants are most important and which can wait.  The family prioritizes, so that no one feels their wants are less important but may just be more expensive.

**The discussion and decision making process as a family build unity in the family and strength in the decision.  Each member has ownership and will want the plan to be successful.

8. DOCUMENT the budget plan.  Decide when and how often to review the plan. ALL PARTIES SIGN IT!  Keep each other accountable - this isn't about blame, its about ownership

9. REVIEW as agreed to or anytime the parties or priorities change.

10. CELEBRATE your achievements as a family and individually.  RECALIBRATE as needed to keep the team accountable and prevent the members from falling into old habits.

This is all about communicating your family's financial philosophy and strengthening not only your financial strength, but your family cohensiveness.

** financial strength is not about a ton of money, its about living within your means and still being happy, healthy, and wise.  It's within reach and I know you can do it! 

Listen or download the Make the Change - Money Monday (10/21) broadcast at: 
http://tobtr.com/s/5578253