Understanding Your Current Financial Picture

Laying the Groundwork for Financial Planning with Your Planner

Welcome to Week 1 of Month 09 in our Masterplan 365 journey! This month, we’re diving into financial planning—a topic that might seem overwhelming at first, but don't worry. We’ll break it down step by step, starting with understanding your current financial picture. By the end of this session, you'll have a clear view of your financial health and a system in place to manage your money effectively using your planner.

Objectives for This Week

Here’s what we’re going to cover:

1. Assess Your Current Financial Health: We’ll break down how to get a clear view of your income, expenses, debts, and savings.
2. Set Up Your Planner for Financial Tracking: I’ll guide you on creating sections in your planner dedicated to tracking your finances.
3. Reflect on Your Spending Habits: Together, we’ll analyze your spending and identify areas where you might want to make changes.

Sound good? Let’s get started!

1. Assess Your Current Financial Health

Before making any financial plans, it’s essential to know exactly where you stand. This involves getting a full picture of your income, expenses, debts, and savings. Here’s how to do it:

Track Your Income

Understanding your monthly income is crucial. This includes your salary, side gigs, child support, or any other cash flow sources.

• Think about all your income sources and how often you get paid. Are there any sources you might be forgetting?
• Use your planner to create an income tracker. Write down all your income sources and amounts to easily see what you have to work with each month.

Document Your Expenses

Expenses can often be where money management slips. By breaking down your spending into categories, you can see where your money is going.

• Grab your planner and start logging your expenses. Create sections for both fixed expenses (e.g., rent, utilities) and variable expenses (e.g., groceries, entertainment).
• Start by logging everything, even small purchases like a cup of coffee. Over time, this habit will reveal your spending patterns.

List Your Debts

Knowing exactly how much you owe is critical for creating a plan to pay it off.

• List all your debts—credit cards, loans, car payments, etc. Include the balances, interest rates, and minimum payments. This will help you face the numbers and make a plan to tackle them.

Assess Your Savings

Finally, review your savings. Whether it’s your emergency fund or general savings, knowing how much you have set aside is crucial.

• Use your planner to create a savings tracker. List your current savings accounts and amounts. If you don’t have any savings yet, write down a goal for how much you’d like to start saving each month.

2. Set Up Your Planner for Financial Tracking

Now that you’ve assessed your financial situation, it’s time to get organized. Your planner will be your best friend in this process. Let’s set it up together.

Create an Income Tracker

Start by creating an income tracker. This will allow you to log all your income for the month in one place.

• Create a simple list in your planner with the source of income and the amount. This will give you a clear view of your total resources each month.

Set Up an Expense Log

Next, set up an expense log. This is crucial for staying on top of your budget.

• Create a section in your planner where you can log daily expenses by category. Use different colors or stickers to make it more engaging.
• Track every expense, even small ones. This will give you a true sense of where your money is going.

Design a Monthly Overview

Finally, put everything together with a monthly financial overview. This is where you’ll see the big picture—your income, expenses, savings, and debts—all in one place.

• Dedicate a full spread in your planner to summarize everything for the month. Include your total income, total expenses, any savings added, and any debt payments made. Add a section for notes or reflections on what went well and where you might want to improve next month.

3. Reflect on Your Spending Habits

With your financial picture set up, it’s time to reflect on your spending habits. This is where patterns will emerge, helping you make informed decisions.

Review Weekly Spending

Set aside time each week to review your expenses. Ask yourself questions like, “Did I spend more on wants than needs this week?” or “What can I cut back on next week?”

• Reflect weekly on your spending habits to catch any budget derailments before they turn into bigger issues.

Identify Areas for Improvement

Look for areas where you could improve. Maybe you’re spending more on takeout than you realized, or those little impulse buys are adding up.

• Identify these areas and make small adjustments. This can free up more money for savings or debt repayment.

Homework: Building Your Financial Foundation

Let’s put what we’ve learned into action with this week’s homework:

Assignment 1: Set Up Your Planner for Financial Tracking

• Monday: Set up your income tracker. Log all sources of income and note the payment dates.
• Tuesday: Create your expense log. Design a space to track daily expenses by category.
• Wednesday: List your debts and savings. Document current balances and goals.
• Thursday: Design a monthly financial overview. Summarize your income, expenses, savings, and debt in one spread.
• Friday: Start tracking your spending daily. Log all expenses, even small ones.
• Saturday: Reflect and adjust. Review the first few days and note any adjustments needed.
• Sunday: Set intentions for the week ahead. What financial habits will you focus on?

Notes Section

Use this section in your planner to jot down any insights or patterns you notice while tracking your finances. Did you find areas where you could save more? Were there any unexpected expenses? Tracking these insights will help refine your financial plan over time.

Conclusion

By understanding your current financial picture and setting up a reliable tracking system in your planner, you’re laying the foundation for successful financial planning. This week is all about awareness—knowing where your money is going so you can make better decisions moving forward.

I'm excited to see how this helps you gain clarity about your finances. Let’s use this week to set up the tools you need to plan for a financially secure future. Thanks for joining me, and I can’t wait to hear about your progress!