You need a financial plan
Fewer LGBTQ folks have a financial plan than the general population. Despite the reasons for that, here’s why all queer people need a financial plan.
Do you have a financial plan?
Just as you likely couldn’t drive from New York City to Los Angeles without directions, you can’t reach a financial goal without a financial plan. This includes knowing the starting point and your end goal.
On episode #35 for the Queer Money® podcast, the fourth in our four-part series on the ‘4: The Four Principles of a Debt Free Life’, we discussed how we created and why we have a financial plan.
We discussed the benefits and risks of not having a financial plan. We cover instruments, such as investment accounts, and ways to increase your income to create and improve your financial plan.
We share how it wasn’t until we knew which direction we wanted to go with our financial lives that we could go from a negative net worth of – $10,000 to a positive net worth approaching $500,000. Since this episode was published, that net worth has grown to $1,000,000
This is evidence of why you need to have a financial plan.
How to build your financial plan:
3 steps to starting your financial plan
1. Do a financial snapshot
The best way to figure out how to get from where you are to where you want to go is first to figure out where you are. As scary as it may be, figure out your Point A.
Total all your assets, including your retirement accounts, savings accounts, checking accounts, and any other assets you have. Total all your debts, including mortgage, auto loans, credit card, personal and student loans, and any other loans you owe to someone or something.
2. Pick your bigger goals
This is a fun step.
Whether they’re financial or not, pick your biggest goals. These should be the goals that will give you long-term happiness.
It’s not just a car. It’s a dream car. It’s not just a house. It’s a dream house. It’s not just having kids. It’s giving your kids the best life you can.
We’ll help you identify these goals.
Once you identify your biggest, most authentic, loftiest goals, then . . .
3. Map the small steps to go from where you are to your bigger goals
Now that you know your biggest goals, estimate how much money you’ll need to reach each goal.
Then, calculate what you’ll need to do over the next 20 years to reach those goals. Then, calculate what you’ll need to do over the next 10 years to achieve those goals. Then, calculate what you’ll need to do over the next 5 years to reach those goals. Finally, calculate what you’ll need to do over the year to achieve those goals.
Remember that most success isn’t due to one decision or point in time. They’re usually a series of little steps made over time.
This may mean you figure out how to pay off your debts or how to save an extra $25 a month, or how to start investing enough in your 401(k) to get your full company match. As we discussed on this Queer Money®, your sand supports your pebbles, and your pebbles support your rocks.
Listen to this episode #35 of the Queer Money® podcast to get the full details.
Principle 4 of a debt free life: Have a Financial Plan
Just like you can’t drive from New York City to Los Angeles without clear directions, you can’t achieve financial goals without a plan. This includes knowing the starting point of where you are financially and the ending point or goal of where you want to go.
On this Queer Money®, we talk about how we created and why we have a plan for our money. We discuss the benefits of a having a plan for our money and the risks without one. Along with this week’s free tool, we cover other tools, such as investment accounts and ways to increase your income to help you have a plan.
We share how it wasn’t until we knew which direction we wanted to go with our financial lives and our lives in general that we could go from a negative net worth of $10,000 to a positive net worth approaching $500,000. This is why you need to have a financial plan.
We also dispel the myths that creating and maintaining a plan is hard and limits you from enjoying your life. As we learned, our budget and financial plan help us do all the things we want in life without the burden of debt weighing us down.
Watch the Queer Money Follow-Up to this Queer Money®:
How can you get more Queer Money® podcasts?
✅ Subscribe to the Queer Money® podcast here @ QueerMoneyPodcast
✅ Hear this original Queer Money® episode @ Have a Financial Plan
✅ Join the conversation in the Queer Money Facebook Group @ QueerMoney
✅ Email us with questions @ [email protected]