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5 Steps to Make a Long-Term Financial Plan

  December 7, 2021  |    #Tools

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A long-term financial plan is more than chance

The French writer and poet Antoine Marie Jean-Baptiste Roger said, “A goal without a plan is a wish.” Despite not knowing who he was, he had a point. Without a long-term financial plan, your money goals are left to luck. Don’t let becoming debt free to chance by getting your free copy of the 7-Step Credit Card Debt Slasher here.

Start your 360-financial plan today

360-financial planning breaks down into three buckets – or jars. They are a daily financial plan achieved day-to-day, a short-term financial plan achieved within three to 10 years and a long-term financial plan that takes 10+ years to achieve. The daily financial plan supports the short-term financial plan that supports the long-term financial plan.

An analogy for creating your 360-financial plan is that of the jar with rocks, pebbles, and sand. If you fill your jar with all your sand, you can’t add pebbles or rocks. If you do the opposite and fill your jar with rocks, and then pebbles and then sand, you can all three into the jar. 

The rocks in this analogy represent your big or long-term financial goals, such as preparing for retirement. The pebbles represent smaller financial goals, such as qualifying for your full employer match. The sand represents the smallest, daily, goals like sticking with your day-to-day budget.

If you only focus on the sand, the weekend shopping and dinners out, you won’t have enough money for your bigger financial goals. Then, that fabulous vacation was nothing but a wish, and a mai tai on the couch isn’t as tasty as a mai tai on the beach.

Hear how to plan your long-term financial plan today on Queer Money®:

5 steps to build your long-term financial plan

1. Pick your 1 to – 3 Q.U.E.E.R. goals

The first step in creating a long-term financial plan is deciding what you most want. What are your biggest hopes and dreams for your life? Only so many rocks can fit into your jar without it breaking. Once you’re clear on these goals – this short list – everything else will fall into place.

On Queer Money®, Going Bigger by Setting Q.U.E.E.R. Goals, we talked about setting Q.U.E.E.R. goals instead of stupid ones. Kidding. No IQ is required. Q.U.E.E.R. stands for (and, yes, we borrowed heavily from S.M.A.R.T. goals because we wanted a goal-setting strategy with a rainbow hew):

    • Quantifiable
    • Understandable
    • Executable
    • Exciting
    • Relevant

2. Understand your ‘why’

Because your long-term financial plan will take five or more years to accomplish, there will be times and situations that challenge your commitment to these goals. A demotion or job loss could knock you off track. An unexpected illness or accident could slow your income for a period. If you understand your “why” – know your passion and drive – you’ll stick to your goals.

Listen to Queer Money® episode #287 for a deep dive into understanding your ‘why.’

3. Open accounts to fund each goal

Once you know what and how many goals you have, open an account to start saving and investing for those goals. For retirement goals, a company-sponsored retirement account such as a 401(k), defined benefit plan or 403(b) with an Individual Retirement Account (IRA) or Roth IRA is ideal.

For non-retirement goals, open a separate account at a bank. There are many banks to choose from today, but only a few banks support the LGBTQ community all year long in myriad ways.

Set up automatic payments into these accounts for a specific dollar amount through direct deposit or recurring Electronic Funds Transfer (EFT). By automating these contributions, you’ll eliminate your regular involvement and the risk of missing or skipping a payment.

4. Automate and monitor

Being successful with your long-term financial plan will require constant engagement from you. Many obstacles and opportunities will come up over the next five-plus years, and you’ll want and need to adjust your budget. If you get a raise or promotion, you’ll have more money that, if allocated correctly, can help you achieve your long-term financial goals sooner. Unexpected expenses could arise, and you’ll need to adjust your budget to meet both your immediate needs and long-term goals.

5. Socialize your long-term financial plan

We, as a queer community with allies, must normalize talking about money and sharing what’s working for us and not working for us. This was the whole point of the 2019 Queer Money Live Tour, which we hope to resume in 2022.

Share your long-term financial plan and goals with a friend, colleague or family member. Making your goals public makes you accountable and finds you an accountability partner. This helps ensure your financial success.

Your accountability partner will ask you about your goals and plans, which will help make them clearer to you. They’ll ask you for updates and, of course, you’ll want to share successes rather than failures. This will motivate you to succeed.

Success is rarely a singular moment or event. It’s usually a series of little habits repeated over time. - Debt Free GuysClick To Tweet

If you want a more formal way to engage your accountability partner with your long-term financial plan and goals, we created our commitment contract that both you and your accountability partner can sign.

Complete these six steps for your long-term financial plan and you’ll be better prepared than 40% of queer people and one-third of the general population.

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More resources to help you with your long-term financial plan:

Get more help for your long-term financial plan:

5 Building Blocks of a Happy Gay Life

We’re David and John Auten-Schneider, the Debt Free Guys and hosts of the Queer Money® podcast. We help queer people (and allies) live fabulously not fabulously broke by helping them 1) pay off credit card debt, 2) become part- or full-time entrepreneurs and 3) save and invest for retirement.

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