Hello, I'm your host, Mr. Chuck. Last week episode we talk about identifying your bad spending habits. And we identified some of them and talked about how you break them. One of the ways you can break a bad spending habit, and get on track with your finances is to create a financial plan. I have a simple and easy way to do it. But before I get started more about this podcast, and I'll be back in 35 seconds, welcome together, we're going to explore our personal finances and figure out how to improve them. Whether you're just getting started in life on your finances, or you may already have a home or you're struggling to get credit cards under control, reduced debt increase wealth.com is a weekly podcast to educate those to improve personal finances, whether it's eliminating debt, or making smart investments. that and paying way too much to the financial instutions than what you should be. To get started. Keep it simple piece of paper, a pencil or a pen. Or if you want to use a word processor, that's just as good. Or if you have a note taken device on your smartphone or whatever you have, you need to write it down bank fees. Number one goal, a financial plan you should state your goals. So your first goal is to eliminate paying all bank fees that are not required or necessary. That's Goal number one, Goal number two, anchor increase the balance in my checking account. So I don't have any more overdraft fees. And in gold number three, set up a savings account and put a minimum of $10 per pay in the savings account and starting a soon as possible. Okay, a financial plan, the first thing you do is set your goals. You got to keep the goals reasonable, and something that you can achieve in a relatively short period of time, since you're already paying too much to the banks and ATM fees, overdraft fees. And those things, I'm assuming that you don't have enough money in your checking account to carry the bills that you're paying. And to you do not have an emergency fund set up a savings account where he is set aside money. So in case an emergency comes up, usually something bigger than not being able to pay your bills from pay period to pay period, such as a name in tires for the car or car breaking down, or your air conditioning in your home going out things like that. You need to have an emergency fund and you quit creating new debt. Once you get that written down, how do you go about solving the problem? Well, the first thing you got to do is create a budget. Now I'm not gonna create a budget for a month. I'm not creating a budget for a year in advance. I'm not creating a budget for six weeks. I'm creating a budget from your last pay period to your next pay period. If you get paid every week on a Friday, let's assume your budget starts on Friday, the day you get paid and ends on Thursday, the day before you get paid. You need to know your happy numbers. What are happy numbers? Well, it's the net pay you receive from your employer, if you do not have a direct deposit going in your checking account from your employer, and you're getting a check from your employer, or they're giving you cash, and you're not depositing it at all into your checking account. While there could be the problem that you have, quit hiding money from your spouse, if you have a spouse, I know a lot of married men do that. quit doing that. Put 100% of your net paycheck into your checking account. No more slush funds for yourself. That's probably the root cause of some of your problems. So once you know you're happy numbers on your net pay, what bills are due to be paid. And the next week is rent, utilities, telephone, which is utility, those type of items you need to identify and make sure you have enough money to pay them. Then you have other items such as groceries, gasoline for the car, school supplies, if you have children, and things like that, that you need to have a little bit more money set aside to make sure you cover how much use should your groceries be? Well, that's where you go back and look at the last two or three pay periods. And figure out how much did you spend at the grocery store the two or three to four times you want to add it all together divided by the number of times that you add it together and add some average. And you need at least that much in the checking account to cover groceries, a little bit more wouldn't hurt. You do the same thing with your car. Unless you're like me, and every time you go to a gas station, you put $20 in and then you go well I need to go to the gas station, at least one time this week, I need at least $20 if you've been paying for cash for gas and start using your debit card for your gasoline, because we want to keep the money in the checking account. So you don't say well, I need$20 for gas I need $100 for groceries and then you spend $5 on gas and you spend $30 on groceries and you waste the rest we're trying to avoid wasting money. And why? Because we're trying to have as much money and a checking account at all times as much as possible. Why? So you don't get hit with late fees, overdraft fees, ATM fees, do not go to the ATM to withdraw cash. If you do, make sure it's an ATM, at your bank. No other bank, make sure that your bank does not charge you a fee for using the ATM. It's little things like that, that help you achieve your goals. I have two articles on how to make a budget. But that's my simple, easy way how to get started on something you need to take care of need to get done. And it's something you can achieve when one pay period or two pay periods. And you can pat yourself on the back and then you can stick with it. And then we can expand on your financial plan. After you achieve these goals and eliminate all bank fees. Increase your balance in your checking account. Set up a savings account and put at least$10 in your savings account. Every pay that will be $40 a month. If you get paid weekly and before you know it You'll have two or $300 in there. And if you have a $200 emergency, you'll have the money to be able to cover it, no problems. In my show notes, I have a link to the articles I'm going to start talking about. The first plan I'm going to talk about is from clever girl finance.com 10 steps to creating a solid financial plan. And I'm just going to go over the highlights. Because like most of you are getting into too much detail when you're first starting a financial plan is going to be overwhelming. And you're not going to follow it through this article, it says create a list of things to plan for, while you if you identified your bad spending habits. That's the list you have. Now how do you plan to get rid of those spending habits that are bad. And you got to write all this down, if you don't write it down. You won't remember a month from now, what your plan was how you know, if you're going to achieve your goals, if you don't remember the plan, so write it down. And then how to create it? Well, creating a plan is fairly simple. You just write down the goals you want to meet. For now, to keep it simple. We're looking at short term goals. How do I get myself out of the mess, amen. So the first big step was to identify your problems. The second big step is to write the problems down. When you write them down. Only thing you do to make it a financial plan is a problem. Too much bank fees, paying, eliminate fees, there's your plan, how long sooner the better. And then you need to go back and review it. I would say every paycheck from pay period, the pay period, so that you can see if you want increase in the balance in your savings checking account, did you put money into your savings account? Those are the things you should be asking yourself, did I achieve what I said I was gonna do? If I didn't, why not? Let's get started as good as do it again, this get going. You can't give up. He got to stay the course as the only way you're gone to get out of overpaying the bank and whoever you're paying, that will help you start making on time payments, you'll have extra money in your checking account, you'll have a savings account, and you'll start building up an emergency fund. Those are all things you need to write down and a financial plan because that is the very beginning of a financial plan. After you achieve those things, and say you have an emergency fund of six to nine months worth of expenses, let's say that it would be very much for most people. It might take you a year or two to do that. Then you can start looking at Do I need other types of insurance other than car insurance and homeowners insurance or renters insurance? Sure I have life insurance does anybody dependent on my income, he can start looking at the other things within a financial plan that a lot of these articles are covering. These articles are assuming you're making a whole lot of money, you're fairly well off, maybe you're struggling a little bit. I'm assuming they you make bare minimum money. Maybe more than minimum wage, but not much. You have a lot of debt, you have a lot of expenses, and you're struggling from paycheck to paycheck. No matter how much money you make. Very little or very much. You need to have some type of plan. Now for those of you who make a lot of money, it's more important to have a financial plan because it's easier to waste money and you start wasting money. And if you say well, I'm going to start a retirement plan. I'm going to start saving for my retirement Next year and 20 years down the road, you go, why didn't I start saving for my retirement sooner? I don't have enough money to retire on, I got to continue to work. So some of the things within your plan is a monthly budget. Now I'm saying a weekly budget if you get paid every week, keep it simple. A debt payoff plan. If you have a lot of credit cards, you need a debt payoff plan. Yes, I agree with that. Next week. The next episode, I'm going to go into detail on a debt reduction plan I've already talked about in previous episodes, and I'm going to review it, I'm going to go over it in detail in the next episode. A fully funded emergency account that would be a savings. retirement savings is a diversified portfolio of investments and multiple streams of income, and savings for other things you want your short, mid and long term goals. It could be something as saving for a down payment for a new car. It could be saving money for a bigger downpayment on move it up to and different home and a different neighborhood. And do you have all the right types of insurance company life, health, disability home, and etc. There is an umbrella insurance policy that covers you for more liability from your home and auto in case something bad What happened? plan for yourself a plan for your marriage depends if you're married or not. Write down your financial goals. Emergency Fund help pay off debt and create a plan to invest. Get the right type of insurance for your needs. Create every plan for retirement plan for taxes. If you usually owed taxes every year, then why is that you need to plan you need to adjust your withholding so that you're least breaking even me, you shouldn't get a $5,000 refund. But you don't need to owe 5000 either. If you get anything under $1,000 refund, and you owe less than$1,000, you're in the right range. And that's what you should strive as far as planning for taxes. Create an estate plan specially once you get over mid 40s. And he start looking for your state who's going to take care of what you never know what's gonna happen, you could have an accident and be killed. Don't know. And then review your plan lay every quarter or at least once a year. And then most importantly, you got to stay the course and avoid overspending and learn from your mistakes. Your journey to financial independence won't be easy. There will be some tough days, weeks and even months. pursuing a goal of financial independence is very much tied to delay gratification is not always fun, but it's completely doable. Have a solid plan for your finances, be discipline and avoid overspending, you find out how great you feel when you really make a concerted effort to stick to your budget. As you work on your finances, you may still make mistakes with your money, and that's okay. Sometimes you might be unable to resist the urge to buy something that isn't in your immediate budget. And sometimes you feel like ripping your entire financial plan to bits, because it just doesn't seem like fun. However, as long as you keep your reasons why you want to be financially free and focused, and make an effort to rebound quickly from your mistakes, you'll do just fine. It's all about assessing the mistakes you make and understanding why you made them and making a plan to avoid making them again, then you'll need to take those lessons and apply them to your future success. And that's very important. So when once we solve the problem of paying too much bank fees, what did you learn from it, that you were one wasting money and to when you don't pay all those fees, you have a lot more money. Keep that in mind because you want to stay the course. And once you solve those issues, then you can start looking at bigger issues. Build an emergency fund, reducing your credit card debt, getting rid of that payday loan, whatever it may be. The less money you owe other people, the more money you have for yourself, gives you more money to buy the things you really need first. And then by those things you want. Second, if you focus on your needs, first, and making sure those are taken care of, and then everything else will fall into place. So no matter what your income, you can do it, you can stay the course. And you can pull yourself out of this debt cycle you got yourself into. I did it. I'm now 100% debt free, and more money. Not really. But my money is gone. And to retirement and savings and building up as fast as I've ever seen in my life. It's well worth working for yourself, sales a whole lot better than working for everybody else, when I mean working for everybody else. I mean that credit card companies, the mortgage company that loan companies for buying your cars, your boat or whatever it is you're buying, it's much better putting that money aside for yourself than it is paying all those bills in some om you probably don't need. If you want to really go into detail on how to write a personal financial plan, wiki How was pitchers? I thought that was crazy. But it's a fairly good article wiki house calm, write a personal financial plan is fairly good. It takes you through all the steps you need to go through. And it was co authored by a certified public accountant and a certified financial planner. And he got to review your current situation you know, he's got you're doing things that you really don't organize your financial records. Yes, I didn't know when you're doing all this, you got to keep your bills organized. If you get you're still getting the paper bills in the mail, hold on to them, at least for a year. And put them in categories utilities, loan payments, credit card payments, grocery bills, keep your receipts from the grocery store gas bills, keep your receipts from the gas station and put them in categories and put them together by month. So that if you need to go figure out an average you got it right there handy just added up divided by the number you got and boom, you got an average, you have a better control on your budget caping your budget under control. It's it's a fine tuning. It's never ending, you're always fine tuning because things change every every month something might change. Develop your financial goals, you know, that's once you get these little things. I referred to little things, the pesky stuff that's been bothering you that's keeping you from achieving what you really want. And then you can sit back and dream. In the next six months, what would I like to achieve financially? And then next five years, what would I like to achieve financially? How much I'd like to save for my retirement? What do I want to do when I retire? How much money do I think I need when I retirement? If you figure out that you need$500,000 it probably most likely need $2 million. If you're 20 years old, those numbers you just need to multiply them out whatever you think you need, multiply by two or three and you're getting closer. So wiki how you got to Pacific goals are one that can be clearly our tickler made it a vague goal like the financial independence makes it impossible to see or fail. Have a concise and precise goal that you can turn into a short statement. Quit paying ATM fees. That's precise goal achieved that within one week. Now you have a target date. measurable goals have quantitative dimensions to them such as get my credit score. Do 750 or have 12,000 emergency savings without assigning a value to go? It's also difficult to know if you're making progress. I want to say $500 a month in my savings, that is a small goal. But something you can identify within one month. If you're putting $10 a month in there, that's 40 $500 or the$125. A week, times four, it's 500. Now you have the numbers. attainable goals are reality based don't make a goal they cannot realistic attain, it would only discourage you from having a plan at all. You cannot put $500 a month in the savings if you only earn $2,000 a month, and your rent is 15 $100 a month. Realistic care why you're paying so much rent, when you income is so low. That is your first problem to identify. And to try to solve. You need to increase your income in that case, or find a cheaper place to live. rewarding. Goals feel good once you achieve them, they should be a positive feedback loop where you have finished a goal and when you want to finish more time based goals are not open ended, but have deadlines and milestones he can fail or succeed at. Remember, plans are not set in stone and they can be changed as you have new information. If you fail at a certain milestone on the way to a goal, adjust the expectation and give it a new deadline. So example, I want to have $1,000 in my savings account in six months. Six months from now I have $800. Okay, well give me two more months, I'll have my 1000. It's a never ending adjustment, something may have came along during that first six months to prevent you from putting that extra $200 in there, even though maybe you knew it was doable, but maybe you forgot you had a bill due or something due that was $200 that you couldn't set aside. This is all from Ricky how to bring your family in, if you're married, talk to your spouse, make sure they're on board with you make sure that they're saving and doing the same things that you are. And of course, if something goes wrong, you need to review your situation and maybe make a change and take a new course of action that will make it more attainable. The one thing that makes it attainable is making more income, maybe getting a part time job, maybe getting a side hustle as they say nowadays will help you earn some more money. And as I said in the past, generally speaking, people are lazy and don't like to do the things they put off doing, doing the things they don't like. So just take a look around your neighborhood. For example, in the fall when the leaves fall, and you got trees around that fill up the gutters, how many neighbors around you never get up there and clean out the gutters. Maybe you can charge them 50 bucks to clean out the gardens takes you an hour. Maybe you have some older senior citizens are not able to do it or maybe shouldn't be done it. Maybe you can charge them $40 give them a break, clean out their guard gutters and solve a problem for them. And you're handy and you're there. And then once you do that first chore, maybe they'll find some other things and you can make another 10 or 20 bucks here and there is that a like a lo of money. But if it pays fill up your car with gas for a w ek, you're going to be ahead of the game that's $20 you didn't s end it all adds up. So go ith things like that and tr to create opportunities for yourself to one make more m ney or to to save money and they get out of debt. I'll be back i 35 seconds with my final thoug ts. You can share this episodes ith your friends. I'm open for any suggestions for improvement or for information that you w uld like to hear about in the future. You can go t my Facebook page and leave e a message more than gla to respond to find my Facebook age go to reduce that increased ell calm and click on the Face ook icon. Creating your finan ial plan shouldn't be a diffi ult task. Keep it simple. Iden ify the problems you're curre tly having. come up with a solu ion on how you're going to s lve those problems and writ it down. It's that simple. As you saw one problem, go on to the next one. As you get better and better at it, it can expand our financial plan to inc ude everything such as a ebt reduction plan, maybe insur nce needs, and other things you would need to develop as our life goes on. Developi g a investment goal should be on of your long term plans. Can't get that done, until you solve the simple and easy problems fi st, and then move