Monday, July 23, 2012

Got a financial plan? You should!

As long-time readers know, (haha--"longtime readers?"), I'm a big Dave Ramsey fan. Not so much for the financial advice stuff, but for the EntreLeadership counsel. Still, he seems to know what he's talking about.

This is from The Power of the Plan: Tap into the power to save yourself heartache, time and money. Basically, American debt (personal debt, that is -- we'll avoid talking about the national debt) went up by several billion dollars from April to May, according to the Federal Reserve. Most of that was credit card debt.

I know financial woes. In 2007, we bought too much house (ironically packed into about 950 sq. feet.). One thing led to another, I lost my job, credit card bills EXPLODED as we scrambled to survive. It's why I started this business. We pretty much made the wrong decision whenever we could.

We paid for it. Me in a very acute way -- our debt and related woes sentenced me to five years of hard labor in this industry. Day by day, grueling hour after grueling hour, I worked to climb out of the hole.

Anyway, that's a story for another day. My point is that far too recently, my wife and I sat down and made a plan. The business is starting to show signs of life, and now that we have reasonable confidence in getting another few years out of it, we're starting to dare to hope and be optimistic. The plan we outlined is ambitious, and it will require a year of "rice and beans," as Ramsey puts it, but it means we have a shot at actual financial peace.

There were immediate unexpected benefits of having a plan: even though we are nowhere near our goal of buying a house by this time next year, we're on the same page, have the same goals, and are speaking the same language. We've always worked well together, but our priorities were somewhat incongruous -- she wanted stability, and wanted numbers, projections, accounting, etc. I just wanted to make sure we had adequate crew coverage and a few working trucks to get through the next day. It was like that for years. With our master plan, it's almost easy. Hah -- well, not exactly easy, but at least clearer.

Check out the link and Ramsey's free online tools. Might be helpful.

Question: what kind of budgeting and money management tools do you use?

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