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The One-Page Financial Plan

A Simple Way to Be Smart About Your Money

By Carl Richards
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The One-Page Financial Plan: A Simple Way to Be Smart About Your Money by Carl Richards

The One-Page Financial Plan (2015) makes budgeting easy: once you know why money matters to you, it’s just a matter of making sure you’ve got enough to do what you want with it, whether it’s creating a stable income or saving for the future. This simple planning solution will give you all the tools, tips and tricks you need to realize your financial dreams.

Key idea 1 of 7

First you have to discover why money is important to you.

The foundation of every successful financial plan is the answer to a simple question: Why is money really important for me? Take a moment and think about this question before reading on, and write down your answer at the top of a piece of paper. You’ll need it later.

Asking why money is important to you helps you to define what you value, which in turn will help you develop a financial plan that fits your individual needs.

As an example, think about the last time you went to the doctor. Your doctor doesn’t give every patient the same medication. They first need to ask what’s wrong in order to determine a fitting treatment.

The same goes for financial plans. Knowing why you value money will aid in the examination of your financial situation. Only then can you develop a “treatment” that will work for you.

Someone who wants to save money to travel the world and someone who wants to have a secured pension will likely have financial plans that look totally different from one another. Whereas one might want to invest in an RV, the other might want to invest in a good pension fund.

Knowing why you value money also helps you assess whether the way you spend your time reflects your values. Imagine that you value money because it gives you the financial freedom to spend more time with your family.

Now imagine that you run an independent business and spend all weekend on Twitter trying to increase your followers to grow your personal brand. You spend so much time on Twitter that you interrupt dinnertime conversations with your family to reply to tweets and check your followers. Are you really living according to your values?

Now that you’ve determined why money is important to you, it’s time to formulate some goals to guide your financial future.

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