Most of the time when I talk about creating or having a 10 year plan, most people’s eyes widen and they say, “Wow! That’s a long time.” Usually they say something more sarcastic than that. My rebuttal is usually something like, “You plan for retirement 10s of years in advance. Why is a 10 year plan so odd?” That argument usually does the trick.
Now that we are on day five of the 10 year plan, it’s time to think about your financial health 10 years from now and what it will take to get to that point.
Assess your current affairs
Like assessing your personal health, it’s important to understand exactly what your financial situation currently looks like before thinking about what you want it to look like. Staying with the theme of health and tasks we completed during day four, you’ll need to know your numbers.
- Find out what your credit score is from all three reporting agencies.
- Know what your outstanding debt balance is, and break up the numbers according to accounts.
- Where is your money? Do you have a savings account, money market account, etc.? Compile a list of where you access your liquid cash.
- Make a list of your assets (non-liquid) such as 401k, IRA, stocks, or property.
Create a monthly budget
If you already have a budget, great. You are leaps ahead of those that don’t. Catch up with us in the “Future budget” section.
Those of you that don’t use a budget, now is the time to get serious. Take back control of your money and learn to make it work for you. There are number of resources out there to help you create and maintain a budget. One of my favorites is Mint.com. Their app is user-friendly and I can track every single transaction I make. It’ll give you a better look at your expenses and income.
Start with your current budget. Delete or cross out any debt repayments, such as credit cards or car loans, that you wish to be done paying in 10 years. Account for inflation and think of items that will need replacing. Create expenses for the life you want in 10 years. If you don’t currently have an entertainment budget and want to afford going out, add an entertainment line item to your future budget.
When you’re creating your future budget, also think of your income. How much do you earn and where do you earn it from? If you are a fellow blogger, you most likely have multiple sources of income. Will they be the same 10 years from now? Will you start a new business venture? Will you land your career job and earn far more than you do currently? Don’t hold yourself back. Anything is possible. We’ll work on the journey together later in this challenge.
Assignment: Pay attention to your relationship with money.
How we view money often affects how we spend and save it. Becoming aware of what we say about money often gives us insight to our relationship with money. If it needs mending, now is the time to focus on that relationship and get to the heart of why you have those views.
Over the course of the next week, write down thoughts or statements you find yourself thinking and saying about money. Having it on paper, right in front of you, makes it harder to run from reality.
If you are just joining the challenge, don’t miss out on some FREE worksheets! I have eight worksheets that will help you through the first eight days of the challenge.