Series: Stages of the financial planning journey – Step 4: Stick to your planned route.

In the first article in this series, I outlined the four steps that I think make up your financial planning journey, namely:

Step 1: Take stock of where you are. What is your starting point?

Step 2: Establish your goals and objectives. Where are you going?

Step 3: Make plans to increase your cash flow margin. How can you get to your destination the quickest?

Step 4: Control your cash flow. Stick to your planned route.

We have reached the final step so if you would like more detail on the first three steps, go read the previous articles in this series which I hope will be very useful to you.

As I mentioned in the first article, this journey is not necessarily linear and you will most likely need to revisit a few of the steps and there is nothing wrong with that! Step four is basically the implementation of step three. You now have a planned route that will get you to your destination the quickest so now you need to follow the route i.e., you need to decrease your expenses, increase your income and use your margin to achieve your goals.  

To go through steps 1, 2 and 3 and then stop there is not going to help your financial situation at all. It’s like spending weeks planning an amazing road trip, packing the car, climbing in and then not driving anywhere. Step 4 falls under the category of “easier said than done” so what can you do to ensure that that isn’t the case for you? Here are some tips:

1. Stick to your budget

Sticking to your budget can feel like torture if you don’t keep in mind WHY you are doing it. Your budget isn’t there to limit you but rather to encourage you.

Practical ways to help you stick to your budget:

• You need to work in some “guilt-free” spending so that you can treat yourself without blowing your budget.
• Use the cash-only or envelope method. Withdraw all the cash you plan to spend that month and place it into various envelopes based on expense categories. Once the envelope is empty, you know that you have used up all the money you allocated to that expense for the month.
• Track your spending using budget tracker apps or go old school and use a whiteboard. Every time you spend money, input it into your app or make note thereof on your whiteboard so that you always know how much you have spent in a month. 

• Be accountable to someone

There is absolutely no shame in asking for help or checking in with someone. This person can be your partner, spouse, friend or someone completely objective, like a financial coach.

If you are going to ask someone to walk this road with you then you need to be completely open and honest throughout the journey, otherwise it will not be beneficial at all. 

• Regular updates and reviews

You may realise after a few months that the budget that you set out is not working for you, regardless of how hard you have tried. All that means is that you need to relook at it and make some changes.

This may also be true of your goals and dreams. You might realise that some of your goals are a little unrealistic and you feel discouraged just thinking about them. If this is the case, review your goals and either break your goals up into smaller, more achievable goals or change the timeframe.

• Never stop moving, even if you hit a road block

When you plan a road trip, you can never plan for everything. There may be a road block or an accident or road works or you may burst a tire, there are so many “unpredictables” and the same is true of your financial journey. We can never plan for everything in life so you will more than likely have a few obstacles thrown at you.

If you hit a roadblock, regardless of what that looks like for you, never stop moving towards your destination. All you need to do is revisit the first 3 steps: take stock of where you are, and give yourself credit for the progress that you have made. Next, determine if your goals, objectives and dreams are still the same or if you would like to add in some additional pitstops. Then map out what your route will look like and how you plan to make it to each of your pitstops. And lastly, hit the road again.

I hope that this series of articles has encouraged you on your financial journey and helped you understand that it doesn’t have to be daunting and overwhelming, you just need to take it one step at a time.

If you would like to talk to me in more detail about any of these steps or if you would like some assistance on your financial journey, please do not hesitate to contact me.