Pick A Number
Financial plans can be overwhelming. Emergency fund, debt, retirement savings, insurance, investments, the list goes on. The SmartPath system will give you a framework to organize your financial life. Once you see the big picture, pick one number and one action for the month. Commit to it and forget everything else. Your number should be something that helps you move forward in your plan. You should be able to remember it, track it and control it. For example, your number could be:
- Monthly Spending Limit: This is the total amount you can spend in the month. “I can spend $3,500 this month on everything.” $3,500 is your number. Where you spend it is irrelevant. Once you hit the number, no more spending.
- Savings Goals: You may prefer to focus on how much you need to save for the month (we call it Financial Fuel). “I need to save $500 this month.” $500 is your number. You can reach it by making more or controlling your spending. You can automate the process and put your $500 in a savings account on the first day of the month. Regardless, all you cares about is hitting $500.
- Date: If you’re a long term thinker, you may simply focus on a date you’ve set to reach your next goal. “By June 30th, I will have $3,000 in my emergency fund.” 6/30 is your number. How you get there is up to you. By focusing on a date, you give yourself some flexibility each month. But be careful, you may find yourself scrambling in the last month and miss your goal.
Once you have your number, put it on your bathroom mirror, your fridge, you dashboard, your screensaver, and anywhere else that’s part of your daily life. No explanation needed, just the number. It’s a simple, daily reminder of your SmartPath plan so you makes better choices.
You will also need to pick a step. The SmartPath system has 7 steps. Pick the one that causes the most stress or feels the most urgent. For example, you may choose to work on your insurance this month. It will take a few days to review what you have, a few days to find options and a few days to complete the process. Focus on insurance and don’t worry about the credit report, your housing situation or investment strategy. Those actions will come in future months. Be methodical and get it done.