Setting Your Financial Goals

Money management is mostly linked to your behavior and less of what you know.The things, people or experiences that we value affect the way we manage our money. 

Our values are shaped by our upbringing, religious beliefs , culture, family, friends, and community.Our values and belief system guide our financial choices.

Our financial plan cannot be based on emotions and value alone. This is the reason why it is important to write down your financial goals and develop a concise plan for managing our money. 

To win with money, you need to set goals, commit to your plan and be consistent.

1. Find your WHY: We were motivated by our mistakes, failures, setbacks and experiences to want a stable home for our kids. One that will not be indirectly controlled by those that we ‘work’ for. In the midst of our struggles and financial reset, we found our reason WHY. Ask yourself, what is my reason why? What kind of life do I want for myself and my family? Where do I see myself in the next 1, 3, 5, 10 , 20 years? 

2.Write down your goals and review them often. Our goals are attached to the end of our monthly budget sheet. When we do our budget, we are reminded WHY we need to stick with the program. It is very easy to loose focus in our fast paced environment. Develop a system that works for you. Maybe a post it on your mirror, or Alexa telling you each day when you wake up what you are striving what. Whatever you do, make sure that you maintain consistency.

3.Your goals should be SMART

Specific: What do I want to achieve? Be as detailed as possible. What challenges do you anticipate? When we set a goal of paying off part of Jay’s student loan of $73,000 in a year, we knew that we were going to face challenges.Some of which were not having to shop, not taking vacations, cutting back on family time and others. Acknowledging those challenges and knowing why we were giving up these things made it tolerable.

Measurable: How are you going to measure it? If your goal is too large, break it down into smaller pieces. Looking at $73,000 in a year is overwhelming. But when we broke it down to monthly goals, we knew we had to focus on raising $6,000 in a month. Focusing on the smaller monthly goals, eventually led to us accomplishing the bigger goal.

Actionable: What are you going to do (actions or steps to be taken)to achieve your goal? Is it cutting back on eating out, meal planning etc.

In the case of Jay’s student loan, some of the steps we committed to were working overtime to increase income, not eating out, meal planning, downsizing our home, budgeting, and cutting out cable. 

Realistic: Is my goal something I can achieve or am I setting myself up for failure? 

In setting our goal of paying off $73,000 in a year, we wanted to set a goal that was attainable and was also going to challenge us. Some months when we felt like we could not meet our goal, we were forced to make drastic changes. Some of which included Jay working 27 days straight in a month or the kids not having Christmas presents. This is where your reason WHY is going to keep you motivated. 

Time Bound: When do I expect to achieve my goal? This helps solidifies your plan. We wrote our deadline down to the hour of the day and minute that we wanted the student loan gone.

In planning  your financial future leave nothing to chance.When you know what and why, it would be time to put the plan in motion. Maybe you are interested in resetting your financial life like we did, or you want to move your finances to the next level. Whatever the case,we recommend you create your SMART goals.

We are giving you the template we used to develop our goals. It worked for us and helped us develop a plan to pay our debt. It is yours FREE.

Creating an Emergency Fund

An emergency fund gives your peace of mind and protects your finances during a financial crisis. It serves as a cushion between you and all the unexpected events that life will throw at you.It prevents you from worrying when you experience a decrease in income, or have no income. Most of all, it makes sure your financial plan stays intact.

Money Used for things that are Urgent and Unexpected

When we were told our emergency fund was insurance preventing us from getting back into debt, we did not fully understood the concept. It was just a matter of time before the message became crystal clear. A few months after we moved into our home, AC unit needed fixing, the roof developed a leak and one of the our cars needed repairs. All of that ended up costing us about $6000.

You will have crisis in your life that will require money. Money in your emergency fund will come in handy for those unexpected but urgent needs.

How much do you need in your Emergency fund?

 
The amount of money you save in your emergency fund depends on your family situation. It is recommended that you save at least 6 months of living expenses .

Some of the things to consider prior to deciding how much you save in you emergency fund include:

• Job security

• Marital Status

• Health of income earners

• Number of income generators

• Family obligations

How to build an emergency fund

1- Create a budget: This will enable you to know what your living expenses are, and help you set a baseline of your spending. 

2-Start and be committed. Irrespective of the amount, save on a regular basis. Be consistent.

3-Automate your savings

4-Get out of debt and increase your income: Consider decreasing your spending, canceling subscriptions you are not using, selling things your don’t need or getting a second job.

Sign up for the free BFR 14-day saving challenge and start building your emergency fund today.

529 Plan

𝐌𝐚𝐤𝐞 𝐠𝐫𝐚𝐝𝐮𝐚𝐭𝐢𝐨𝐧 𝐬𝐨𝐦𝐞𝐭𝐡𝐢𝐧𝐠 𝐭𝐨 𝐥𝐨𝐨𝐤 𝐟𝐨𝐫𝐰𝐚𝐫𝐝 𝐭𝐨! 

The 529 plan is an investment vehicle used to save for education and education- related expenses .

Benefits of the 529 plan

It is a tax -advantage account

Can be used for education related expenses for any age: elementary through college level and beyond 

It is transferable to other siblings and relatives( in case one decides to skip college) 

Owner controls the account not the beneficiary

Can be used for tuition and other education-related expenses such as housing 

Accounts owned by the parents have very little impact on financial aid so child may still qualify for financial aid 

Disadvantages

Limited investment options

Has associated early withdrawal fees

May have a short investment window if you start late

𝘔𝘢𝘬𝘦 𝘺𝘰𝘶𝘳 𝘣𝘦𝘯𝘦𝘧𝘪𝘤𝘪𝘢𝘳𝘺 𝘦𝘹𝘤𝘪𝘵𝘦𝘥 𝘵𝘰 𝘵𝘰 𝘨𝘰 𝘵𝘰 𝘴𝘤𝘩𝘰𝘰𝘭. 𝘉𝘳𝘦𝘢𝘬 𝘵𝘩𝘦 𝘣𝘰𝘯𝘥𝘴 𝘰𝘧 𝘴𝘵𝘶𝘥𝘦𝘯𝘵 𝘭𝘰𝘢𝘯𝘴!

Disclaimer: Consult a Financial Advisor on whether to, and how to implement investment advisory services.

How to talk to your spouse about money

Talking to your spouse about money can be very challenging. This is in part because each spouse has a different relationship with money. The value they give to money, how they feel about money, the way they manage money, or their financial upbringing. 

Due to these differences, It is no surprise that talking to your spouse about money can awaken feelings of anxiety, fear, resentment, and distrust.

 These money talks even though stressful, are necessary for a healthy marriage.

 𝐓𝐡𝐞 𝐠𝐫𝐞𝐚𝐭 𝐧𝐞𝐰𝐬 𝐢𝐬....... Some things can be done to make these conversations less stressful.

In our quest to build a stronger, and more solid financial foundation for our marriage, we realized that 5 things are needed for a couple to talk about money without fighting. 

 1- Be open and honest with each other.  Avoid playing the blame game. It is hard for ANYONE to admit that they are wrong. 

“HERE ARE MY STRENGTHS, HERE ARE MY WEAKNESSES. SINCE WE ARE A TEAM, HOW CAN WE SUPPORT EACH OTHER?”

2- Be aware of your emotions, and keep them in check. Taking emotions out of these discussions is a hard task. So talk to your spouse about the feelings you have about your current financial situation and how your feel thinking about the future. Lead the conversation with love, and focus on creating a financial plan to tackle any money problems. 

3- Schedule financial discussions and make them fun (why not make it a date night too? ) Try not to talk to your spouse about money when you have had a long tiring day at work, or when emotions are running high. Give your partner an added reason to show up. Make room in your budget for fun activities to keep each other motivated to keep working toward your goals.

 4- Be consistent. Be intentional and make these discussions recurring events on your schedule. Block out specific dates in the month and set reminders. Those small consistent changes add up to the big wins.

 5- Both parties should be involved. No spouse should dominate the conversation. Be sure to seek each other’s opinions. Ask open-ended questions that allow your partner to contribute more than a “Yes/No” to the discussion. If you have a difficult time controlling the conversation, get a timer and take turns talking uninterrupted. 

Talking to your spouse about money keeps you accountable to each other. It also facilitates you reaching the financial goals your set for your marriage sooner. 

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