In my work as a money coach and financial writer, I get asked a lot of questions about money. I work with people in low to middle income backgrounds, and firmly believe that everyone should have access to financial literacy tools. It doesn’t matter if you come from money or you grew up poor; everyone needs a money plan, and everyone should had access to tools that help them create that plan.
People want to know what to do with their money; how to save it, and how to earn it. And the common thread that runs through these questions is that people feel insecure about making money decisions.
Before I started Bravely, way back when I was merely blogging about paying off my student loan debt and trying not to cry in my car everyday, I began to garner a reputation among my friends for talking about money. I was always down to talk about my debt, or to talk about someone else’s. I liked sharing what I was learning about money. After a few months of changing my lifestyle pretty dramatically to make serious headway on my student loan debt, people knew that I would have answers to some of their money questions.
Today, I do basically the same thing I was doing in those personal conversations; share what I know, what worked for me, and tools that might help other people take control of their financial lives.
Why So Insecure Boo?
I felt really confident diving into the world of personal finance, but that makes me something of a weirdo. Most people don’t feel confident about money.
People want to be told what to do with it- they don’t feel confident calling the shots on their own. Why? Everyone is different, but our confusing financial system certainly plays a large part. Our tax laws are difficult to read and can change at the will of Congress and the President. Jargon like ‘reverse mortgage’ or ‘APY’ get tossed around willy nilly, and they seem designed to confuse people.
There are approximately a zillion factors that go into determining what you should do with your money. And those factors change from person to person. A parent is going to have different financial needs and goals than a non-parent. Someone with a trust fund is going to have different needs than someone without one.
So it is literally impossible to lay one plan that will work for everyone at the feet of 300 million Americans, let alone the 7.4 billion people on earth.
However. (Because there’s always a however, right?) There are money moves that will generally always be good moves for people, no matter their background or their goals. Paying off debt is generally a good thing. Investing in appreciating assets is generally a good thing. And having a big picture money plan is always going to be a good thing.
We’re All Different…And Yet The Same
Boiled down to the most basic level, humans are all just bags of meat floating around on a rock in space. We are all the same, and yet we are all having a unique experience. And of course, things like our cultures, our ethnicities, our nationalities- these all color our time on this big old rock.
But a little secret is that no matter who you are, you should have a money plan. You should know what you’re currently doing with your money, and what you want to someday do with your money. And that’s a money plan.
Even if the peculiarities of everyone’s plan looks differently, we all need to have one. It should be comprehensive, even if it’s not always detailed. It should include a budget, a will, and your hopes and dreams.
Lucky for us, we’re living in the digital age. There are apps to help us with all of this stuff! We can use Mint to budget. There’s Qapital for saving. We can use Tomorrow to set up a will. A lot of the work that goes into a money plan has already been done by other companies.
How To Create a Money Plan For Yourself
So my honeyed tongue has convinced you that you need a money plan. But how to make one? Where to start?
The great news is that your money plan doesn’t need to be totally comprehensive and cover your entire life TODAY. As your life grows and changes, you’ll add or subtract to your money plan. If you’re 18 and reading this, I don’t expect you to be opening college savings accounts for the kids you won’t have for another 10 years. But here are the three steps you can take now to get you going.
1- Look at All Your Accounts. The first step of anyone’s money plan is to take a look at their current financial situation. Take a look at all your accounts; your credit cards, your student loans, your bank accounts, that weird account your mom opened up for you when you were 7 and then never mentioned again. Look at all of it and figure out what you have coming in, what you owe, and where it all comes from.
2- Set a Goal. Goals kickstart plans. Setting a goal shows you where you want to go. Once you know that, you just reverse engineer that ish to get there! Say you want to organize your finances. You can open up different savings accounts for different financial goals, set a date for when you want to be debt free, and download a budgeting app. BOOM- you just wrote yourself a money plan. You can snag our free goal setting worksheet here to get clear on your personal money goals.
3- Make Sure You’re Prepared You probably don’t think of your money as homeless. But unless you have set up beneficiaries on all your accounts, your money will be just that if anything happens to you. Especially for all my business ladies out there- does anyone know the passwords to your business bank accounts? Is there a plan in place for contacting your vendors or customers if you can no longer do business with them? Setting up things like wills and trusts with a company like Tomorrow will give your money a home if for any reason you can’t be in total control of it. And super duper bonus: Tomorrow is FREE.com to use. That’s right- it’s a budget friendly tool you can use when you are crafting your money plan.
Just like that, you’ve got yourself a money plan. And again, this is all subject to change. Look at Meghan Markle. You think the money plan she had when she was 22 is the same one she has now that she’s a freaking princess? No. That plan has been changed dramatically. So too will yours, even if you don’t become a princess.
This post sponsored by Tomorrow Inc. As always, thoughts and opinions remain my own.