The GPS to Financial Success
Growing up, I remember riding to the bank with my mom on Fridays she got paid to cash her paycheck. I would watch her as she paid bills, bought groceries, and took care of other responsibilities around the house. As a child, this became a norm for me.
After graduating high school, I attended college. I worked on the side to pay bills and like majority of my friends I used the money I had left to get what I wanted. I was fortunate to attend college with no student loans, but I still felt like I was struggling financially.
It wasn’t until after I graduated college that I began to understand why I was experiencing dissatisfaction in my financial life. I knew how to pay bills and spend money, but I didn’t know how to build a successful financial future. The things I learned about money while growing up were picked up from watching my surroundings. I didn’t realize that subconsciously I was programming myself to indulge in some of the same poor financial habits as the people I watched.
My story is like so many adults today who never had a real conversation about financial success growing up. Thus, many people find themselves in financial distress later in life. As parents, it is important to become intentional about teaching your children successful financial habits.
Fortunately for me, I realized I needed a financial blueprint for my life. That’s when I devised the G.P.S Financial Method. This method helped me to focus on my financial life in a way that kept me organized and allowed me to take control of my future.
The G stands for Goals. I decided to compile a list of things I really wanted to accomplish in my life. I thought about things such as when I wanted to retire, when I wanted to buy a house, when I wanted to buy a car, and what type of vacations I wanted to take in the future.
The P stands for Personal Expenses. This is where I created a budget for myself. First, I added up all my sources of income. Then I wrote down my expenses. I broke my bills up into 4 different categories. The columns were named DEBT, ONGOING, PAY UP, and VARIABLE. The debt column listed my loans and credit card balances and monthly payments. The ongoing column reflected the bills that I am required to take care of monthly. The pay up column listed bills I chose to pay up 3-6 months in advance. The variable column listed the items that I purchased but not as often.
After I listed all my expenses, I subtracted them from my sources of income. By doing so, I put together a strategy and got a clearer picture on how realistic my financial goals were. I was able to see if I needed to pick up a second job, start my own business part-time, or cut back my spending habits.
The S stands for Study the Financial World. I took out time daily to learn about different products that could help me reach my financial goals faster. Some key terms for me were Annuities, Life Insurance, Stocks and Bonds, IRAs, and 401ks. After learning the pros and cons of each product, I began to start saving.
By incorporating this plan, I redesigned my financial life and begin to take control of my financial future. As a parent, you have the biggest influence over your child. Whether we intentionally teach our children healthy financial habits or not, they are watching us. What habits are your children learning from you?