"Plans fail for lack of counsel, but with many advisers they succeed," Proverbs 15:22.

Financial planning is the intentional development of a plan for your money.

This deliberate plan is designed to guide you toward successful saving, spending, and investing. A financial plan is concerned with the present and the future.  However, if you have  financial consequences from your past, your financial plan will have to address them as well.  Examples of past consequences might include: alimony, child support, consumer debt, and bankruptcy.  Your financial past will follow you into the present and future. Even in you have had no financial problems in your past, some of the issues that will influence your future include:  career, income, budget, spending practices, marriage, children, housing, medical issues, retirement savings, student loans, car payments, and many other past and present debts also involve both the present and the future. Most people already have a plan for their money.  The average person's plan exists only in the mind of that person because they haven't taken the time to develop a financial plan.

Consider the following financial planning options.

10/90 Principle...Pay Yourself First

Deliberately decide to pay yourself a certain percentage of each paycheck you earn.  Consider using what we at call the 10/90 Principle.  Pay yourself 10% of your income and use the remaining 90% for all other expenses.  A good starting point would be to save or invest 10% of your take home pay.  For example:  If your take home pay equals $1,000 every paycheck, save a total of $100 from each and every paycheck.  At the end of one year you will have saved a total of $5,200.  At the end of ten years you will have saved a full year's pay, or $52,000.

  1. Begin by depositing your money into a regular savings account in your bank.  This will provide liquidity.
  2. Be disciplined with your savings account; don't spend it for just anything.
  3. Start an emergency fund.  Most financial planners suggest that you have a minimum of six months living expenses in savings.  That equals $25,000 for every $50,000 you earn.
  4. Once you have established a well funded savings account you may choose to begin depositing your money in Certificates of Deposit or a Money Market account.  Liquidity, or being able to access your money should you need it, should be one of the key considerations as to where you choose to deposit your money.
  5. After reaching your goal for your emergency fund, consider investing the 10% you are paying yourself.  Over time, consistent investments will grow at an astounding rate.  See the illustration below.


Calculate your own savings by consulting a savings calculator........


Everyone has had problems with spending at one time or another.  If you are still struggling with your spending you need to get a grip on your spending.  Getting a grip means that you gain control over your spending.  Wouldn't it be great to know that you control your no longer controls you! 

If you have no idea where your money goes, try charting every penny of your spending for a month.  This will allow you to know where your money is going.

  1. Develop a spending plan.

    Decide where your money will be spent.

    Develop categories such as:  House payment / rent, Automobile, Food, Medical, Charitable giving, etc.

    Allocate the amounts for each.

  2. Set aside some money to have fun with.  Use it for entertainment, hobbies, travel, shopping, or anything you choose.  Keep this category separate from your other spending categories.  This will allow you to have better control over where your money is being spent.

Investing is something you do to be able to make money with your money.  Some have either buried money in the back yard or stuffed money under their mattresses.  Neither is a good idea.  You may forget where you buried it, or your house could catch fire and your cash would be gone.  If money is left lying around it is losing at least 4-5% per year due to inflation.  By investing your money you are able to make money with your money.

  1. IRAs, Traditional, and Roth
  2. Stocks
  3. Bonds
  4. Trusts
  5. Other gold, silver, collectibles, etc.

10/90 Principle Produces Results

Aaron and Andy each started investing $200. per month into a ROTH IRA.  Neither ever

missed a month and both earned 12% on their investments each year. Aaron started at age 30 and Andy started at age 40.  They retire on the same day at age 65.

Time Equals a Lot More Money

  • Aaron and Andy both retire on the same day at age 65. 
  • Aaron's retirement account is worth $1,286,191.89
  • Andy' retirement account is worth  $  375,769.33

Both made exactly the same $200. per month investment into identical ROTH IRA accounts which earned a 12% per year increase.

By starting 10 years earlier than Andy, Aaron' account was worth $910,422.56

more than Andy's.  Ten years equaled almost $1 million dollars difference.

See the Complete chart in the Rich tab.

  • Financial Planner

You may wish to consult with a certified Financial Planner.

A Financial Planner is someone you pay to manage your money.

As in anything else, be careful.  There are both honest, and unscrupulous planners around.  The honest kind will make money from your money.  The unscrupulous kind will take your money and leave you empty handed.