MY PERSONAL FINANCE JOURNEY & 10 EXPERT TIPS TO CREATE A WINNING HOME FINANCE PLAN
Do you feel like your finances could use a facelift? You’re not alone. Way too many of us either mismanage our finances or fail to create a home finance plan in the first place. Either way, the time to take action is now. In this article, I’ll share my personal finance journey with all the ups and downs. And then, I’ll share some helpful tips you can use to create a personal finance plan that works for you. Let’s get right into it!
My Home Finance Journey: The Beginning
In the early days, my husband and I were utterly lost! We needed guidance and had empty pockets, so we were conflicted about managing and paying off debt.
Our journey toward financial freedom started years ago, and it was nothing short of a thrilling adventure. It all began with a simple yet life-changing decision – we treated ourselves to a rare lunch date, escaping the chaos of parenthood and stepping into a cozy restaurant. As we enjoyed our meal, we embarked on a mission to redefine our financial future.
What made our situation even more relatable to many is that, like countless others, we had our differences. Our spending habits and financial objectives were far apart, but we were determined to make it work. We knew that the key to success was creativity and compromise. That meant finding innovative ways to accommodate each other’s desires while staying on track with our financial goals.
Overcoming Past Trauma
In 2007, we ventured into the world of managing our finances together. At first, we had separate accounts, which were a product of past experiences and lessons learned. For one of us, it was a way to heal from childhood trauma caused by financial mismanagement within the family. We understood the heavy burden of financial stress, especially when combined with the trauma of past experiences. However, we were determined to overcome it.
This family image features the Stone Family, with Jordan’s brother Cameron, and his wife, Kelsey. Cameron is a financial advisor affiliated with Edward Jones, while Kelsey is the owner of The Market on 4th.
The First Steps to Success
The initial steps in crafting a successful home finance plan are often pivotal. Once we diligently documented all our financial details, we focused on two paramount objectives: (1) tackling our smallest debts as a priority and (2) building a safety net of $1,000 in savings.
Credit Card Management
We also chose only to use credit cards once we could responsibly pay them off monthly without paying a penny in interest! The credit card companies know us as deadbeats (people who pay their full credit card balance each month).
Yep, we are deadbeats and proud of it! As we became confident in having a credit card, we decided it would be best to use it responsibly and make a percentage of what we spend throughout the year. I must emphasize that it took a few years in our marriage to make this HUGE step.
Savings Account Management
To supercharge our savings strategy, we took another smart step. We established a separate savings account at a different financial institution to ensure these funds remained out of sight and out of mind. This separation enabled us to nurture our savings consistently. It served as a shield against any temptation to dip into them for non-essential expenses.
A piggy bank, illustrating a strategy for saving money.
Our commitment to financial stability didn’t stop there. After giving 10% for tithes, we devoted 20% to our savings account. This took time. We witnessed remarkable progress as we continued fine-tuning our spending habits and explored opportunities to boost our income.
Imagine the thrill of allocating a whopping 40% of our earnings toward savings! When I excitedly shared this milestone with our accountant, their response was a mix of surprise and curiosity. ‘That’s a bit steep, isn’t it?’ he exclaimed.
I’m genuinely curious to hear your thoughts on all my fellow accountant friends known for their financial knowledge and expertise! Were we setting the bar too high, or is this the ultimate savings challenge? What do you see as the average, and what are your professional recommendations?
The turning point in our dedication to savings came when I listened to an impactful audiobook. The author shared a poignant analogy that left an indelible mark on me. They posed a hypothetical scenario: Imagine a life-threatening disease requiring a $1,000 medication with limited availability. The question was simple yet profound: Would you have the cash readily available to save their life if your child faced such a dire situation?
This revelation struck me to the core, and from that moment onward, saving became the paramount goal in our budgeting journey. It wasn’t just about securing our financial future; it was about ensuring we had the means to protect our loved ones in times of need.
Consider this: If an unforeseen crisis strikes tomorrow, do you have the financial cushion to protect your loved ones and secure your future? What steps can you take today to ensure you’re prepared for the unexpected and can provide for those you care about most?
A Tool for You
Looking for a comprehensive tool to help you achieve your financial goals in 2024? Stay tuned for our 2024 Home Calendar & Financial Planner, designed to make budgeting and savings a breeze!
I’ve found an invaluable resource that provides expert money-saving tips and a powerful savings goal calculator.
In the image, Jordan and Christian meet with their financial advisor and trust representative to discuss their financial plans and secure their financial future.
The Power of Consistency
Home finance plans can be challenging, especially when one spouse may need to be on the same page as the other. There will be times when you want to give up, and I know this firsthand.
Through our journey, which began in 2007 and took shape in 2022 when we started making financial appointments together, we encountered our fair share of hurdles. Disagreements, conflicting schedules, and times when one spouse seemed less willing to contribute—it all came our way.
But we refused to let these obstacles deter us.
Our Idea of Consistency – Once a Week Check-ins
While most couples address their finances once a year, we chose to tackle them every week. It took us years to reach this point, but the satisfaction of moving forward together made every effort worthwhile. After a while, we found ourselves eagerly looking forward to our weekly ‘financial Fridays,’ armed with a cup of coffee and a heartfelt prayer, ready to dive into the nitty-gritty of our finances.
If you find it challenging to dedicate time weekly, setting aside a day once a month is equally powerful. The key is to find a schedule that works for you, stick to it, and, most importantly, start and maintain that consistency even if you are on your own.
Practical Tips for Crafting a Winning Home Finance Plan
In addition to sharing our personal journey, we want to equip you with valuable tips and strategies to strengthen your home finance plan. Here are some actionable steps to consider:
1. Set Clear Financial Goals
You can start by defining your short-term and long-term financial objectives. Whether it’s buying a home, going on a vacation, funding your children's education, or retiring comfortably, having clear goals will guide your financial decisions.
2. Create a Budget
Establishing a monthly budget is fundamental to managing your finances effectively. Track your income and expenses to identify areas for reduction and allocate more to savings and investments.
3. Build an Emergency Fund
A financial safety net is crucial. Aim to save at least three to six months’ worth of living expenses in an easily accessible account to prepare for unexpected emergencies. This will take time. Don’t be overwhelmed.
4. Pay Off High-Interest Debt
Prioritize paying down high-interest debts, such as credit card balances. Reducing debt improves your financial health and frees up more money for savings and investments.
5. Save for Retirement
Secure your financial future by regularly contributing to retirement accounts like a 401(k) or an IRA. Take advantage of employer-matching contributions when available.
6. Diversify Investments
When considering investments, diversification can help spread risk. Explore a mix of assets tailored to your risk tolerance and investment horizon.
7. Stay Informed
You can keep yourself updated on financial news and market trends. Being well-informed empowers you to make sound investment decisions.
8. Consult a Financial Advisor
Seek professional advice from a financial advisor or planner. They can provide personalized guidance and help you navigate complex financial situations.
9. Review and Adjust
Revisit your financial plan and investment portfolio. Make necessary adjustments to ensure you stay on course to reach your goals.
10. Be Patient
Remember, building wealth is a long-term endeavor. Avoid reacting hastily to short-term market fluctuations.
Ready to take control of your finances and organize your life in 2024? Please take advantage of our 2024 Home Calendar & Financial Planner. Mark your calendar for December 1st, 2023, and be among the first to grab your digital or hard copy. Stay tuned for more details!
The Heart of It All
So, there you have it – my personal home finance plan journey and tips you can keep in your back pocket. Our journey in managing finances with our home finance plan as a couple has taught us that it’s not about where you start but how far you’re willing to go together in refining your home finance plan. It’s a step-by-step process with challenges, compromises, and small and significant victories.
At the heart of it all lies the strength of our relationship, our family’s well-being, and the pursuit of a less stressful and financially secure future. It takes time, and the endeavor is ever-evolving; it’s not easy. However, you will continue to improve and become much more financially secure with every step you take with your home financial plan. It will also become a part of the legacy you build for your loved ones.