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Posts Tagged ‘Action Plan’

Getting Your Financial Affairs in Order – Where to Start

Posted by denisefisher on October 21, 2010

Financial Plan There is one main reason why people do not have their financial affairs in order: it’s easier NOT to do it. It’s a task that can be overwhelming because there’s no instruction book, no deadlines, and no starting point. And everyone’s situation is different.

So, right here, right now, I’m going to create a starting point, put together a customized instruction book and action plan, and establish deadlines and timeframes.

The Starting Point – Choose a Model and Built on It

I am using the Suze Orman’s Action Plan as a starting template for my project of getting my financial affairs in order. Another resource that I like is Dr. Lois Frankel’s book Nice Girls Don’t Get Rich. By using these books as guides, I can write out a list of financial categories, add more specific tasks, and put together topics that will be used in my plan of action. So my starting point is to identify what is in the plan that will make me feel that my financial affairs are in order.

Put Together a Customized First Draft List

I started by just listing everything financial that came to mind (either from reference sources, or my own experiences), focusing on things I knew I needed to include for organizing my financial affairs. Consulting the suggestions of experts will help you identify the financial issues you haven’t thought of or don’t know enough about. I used the Table of Contents from the above mentioned books as my first source for identifying financial issues to put on my list. I could skip some of the topics that didn’t apply to me, and I could add other items that came to mind as I read through the contents. I know there are lots of other resources out there with helpful guidelines, but it would be easy to get bogged down in the research behind putting together the BEST plan ever. And I don’t want to do that. This is not a one-time project, and I will revisit this plan later, as situations change, and I have the need to add financial tasks to my list. For now, I will keep things simple, and start with the basics. Here are some of the categories and various items I came up with to start:

  • Credit
  • Retirement
  • Saving
  • Spending
  • Investing
  • Real Estate
  • Additional sources of income
  • Insurance
  • Net Worth
  • List of all assets, debts, accounts, terms, beneficiaries
  • Credit reports and FICO score
  • Bill paying procedure
  • Estate Planning
  • Will
  • Revocable living trust with incapacity clause
  • Advance directive & durable power of attorney for health care
  • Updated list of beneficiaries
  • Tax planning
  • Emergency savings
  • Payback strategy
  • Purchase plan
  • Maintenance/repair/remodel/replacement plan
  • Inventory documenting all possessions
  • Insurance assessment (including Long Term Health Care)
  • Financial goals (and integration with other life goals)
  • Timely financial follow-ups
  • Eliminate recurring costs, avoiding penalties
  • Tax planning, record keeping & filing
  • Paperwork management
  • Electronic financial record keeping
  • Maximizing income
  • Not giving away time, services, or reimbursable expenses
  • Leaving money on the table
  • Borrowing/Debt policy
  • Financial review plan

Next Steps – What, Where, and When

At this point in the process, I started to run out of steam for what I needed to do next – which is to put the list into some kind of order. It took me about 3 hours to put a first draft list together and write it all down. But I also realized that there were next steps that I needed to identify before stopping for the day. I needed to identify what the next task was (organizing the list), including the “where and when” of doing that next task.

Creating a standard default “where and when” for this activity as a project that is repeated on a weekly basis is a good practice. Even when there are interferences that call for skipping a week or implementing an alternate plan, having a “Plan A” to return to provides the structure and continuity most likely to help me stick with this project for the long haul.

“Where”, was relatively easy for me to determine. I have two identified work spaces (depending on which location I’m in) where I know I do my best financial work. I don’t usually have to worry about interruptions from others, though when I have had this issue to deal with, my preferred “where” has been the local library reference room.

The “when” is trickier – things come up which can make it difficult to keep an appointment with myself (including my motivation and momentum, which is not to be overlooked). I first think of how long I will need (and how long I can stand) to work on and complete the next step. Usually two hours is the maximum tolerance level for staying focused on one task, non-stop. But I will allot three hours, because I will also need to write down what I’m doing, and I think it’s realistic for me. I’d like to connect this task with my weekly viewing of The Suze Orman Show, which is on Saturday nights at 9 pm (and which I follow with an hour of watching another financial show – Till Debt Do Us Part, which comes on immediately following Suze Orman). But I know I’m unlikely to be in the mood to work on my project at 11 pm on a Saturday night. So, I will plan to work on this task Sunday, from 11am – 2pm. In preparation for this timeframe, I will make it a point to do some pre-project planning on Wednesday at 7pm. There will be no defined length of time for this planning task – simply reviewing the information I have, and doing any additional work that I feel like doing will be the goal. To summarize, here are my next step details:

· Task: Organize the List

· When: Sunday, 11 am – 2 pm

· Where: My designated work table

· Pre-planning Review: Wednesday, 7 pm

Motivational Task: Watch The Suze Orman Show, Saturday, 9 pm; followed by Till Debt Do US Part at 10 pm.

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