Make your daily financial plan
Successful business and motivational coach, Jim Rohn, said, “Success is a few good habits repeated every day. Failure is a few bad decisions repeated every day.” Therefore, the success of your short-term and long-term financial plans are dependent on your daily financial plan. Follow these six steps and download our personal and private budget here to make your daily financial plan.
Your daily financial plan will feed your bigger financial plans
Continuing our rock, pebbles, and sand analogy, it’s the “sand” that distracts most people. It’s that small stuff that adds little value and disproportionately wastes your time and money. When talking about y our long-term financial plan, we discussed how filling up your jar first with sand stops you from being able to add the important stuff – your “rocks” and “pebbles.”
By prioritizing and filling your jar first with rocks, then pebbles and then sand, you’re positioning yourself for financial success.
As an example, David and I discussed our priorities thirteen years ago. Our sand was buying clothing and clubbing. When we wanted to buy a house, a rock, we couldn’t afford it. Over several weeks, we discussed our true financial and life goals.
Clothes and clubbing weren’t at the top of our lists, but they were consuming our lives. Most people can’t have it all, and we’re no exception. As David says, “If you can’t enjoy the big things in life, enjoy the small things. If, however, you enjoy the small things in life too much, you’ll never ever get to enjoy the big things.”
Once we learn what was important to us, we prioritize better.
Here are the six steps we used to create our daily financial plan (sand) that feeds into our short-term financial plan (pebbles) that then feeds into our long-term financial plan (rocks).
1) Choose one to two daily habits to support your one to two short-term financial goals
For example, packing your lunch every day rather than eating out can be a real budget-saver. The average American spends $1,000 annually eating out for lunch. A nice vacation costs $2,000 or less. Packing your lunch every day and saving $500 every year means you’re a quarter of the way to your short-term goal of saving $1,000 annually for a $2,000 vacation.
Would you rather have a margarita down the street or in Puerta Vallarta? Yeah, me too.
What other small habits can you adopt to make it easier to achieve your short-term financial goals? Use the same exact budget we use to find out!
2) Adopt mentally stimulating habits
You don’t have to read Barron’s every week. Sweet Mother Nature knows we don’t. Just know what’s going on in the financial world and how it affects you.
Don’t take Econ 500. Find money bloggers who speak to you and knows at least as much about managing money as Paris Hilton knows about DJing.
Pay attention to the fluctuating prices of the products and services you buy, and adjust your budget (get your budget now!) accordingly.
Lastly, meditate. Meditation clears your mind. This clarity effects every aspect of your life. If your rocks are your true long-term financial goals, daily meditation will help you focus on them.
3) Create a daily financial plan and budget
If, one day, you plan to do nothing to save money, know what you will do so you aren’t tempted away from your do-nothing, spend-nothing day. Distractions and boredom lead to spending the money you’re trying to save.
4) Adopt a “cash and count” system
Use only cash. Unless you have great willpower, credit and debit cards are misleading. Using cash to cover most of your expenses and storing it in designated envelopes will give you a daily count of how much cash you have.
If you “underspend” in a category during a period, put these savings towards the next period or towards your short-term or long-term financial goals.
5) Use money conscious technology
Make technology work for you by automating your bill payments, emergency savings, regular savings and investing. Have account statements emailed to you. Add text alerts to your credit and debit cards, and your checking and savings accounts. Use your bank and investment firm’s apps to stay on top of your spending, savings and investing goals.
6) Make your daily financial plan fun
Have fun! This is critically important because otherwise you’ll fail or lose interest daily financial plan.
Keep your eye on the prize and know that the success of your daily financial plan, will lead to the successes of your short-term and long-term financial plans.
For example, the closer we get to our savings goal for a vacation, the more excited we get. If the stock market isn’t going against us, it’s exciting to watch our retirement accounts grow. We have more working years ahead of us, but we can already see those daily strolls on the beach.
Enjoy it. Have fun. Don’t take it too seriously, and easily forgive your mistakes.
These are our tips for creating a daily financial plan. Combining these daily financial plan tips with our tips for short- and long-term financial planning provides you with a gives way to achieve financial success.
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