Finance: The One-Page Financial Plan, Carl Richards

The One-Page Financial Plan
Carl Richards
ISBN: 9781591847557
A simplified direct approach to counteracting the tendency to do nothing when you can't do the best.
Read August 2016

Richards is very smart.  He knows that when faced with difficult decisions, the tendency is to waffle back and forth and to hesitate and not do anything, rather than have to know that you DID do the wrong thing (or even perhaps the not the absolute best thing).  This gets really bad when dealing with financial issues, because really, doing SOMETHING is generally better than doing nothing at all.

So he breaks things down into simple (not necessarily easy) suggestions:

Track your daily spending.

Make a budget or use expense-monitoring software and check to see if your ideas about your spending match reality.  Adjust either ideas or reality until they match.  Don't spend time feeling guilty if it's not a match, just make it match however goes best for you.

Figure out what YOU want money for, and what that looks like to you in 5, 10 years?
Security?  Travel?  Kids?  Retirement?  New house?

Keeping your current spending habits and lifestyle in mind, AND what you want for the future, start researching how much money you need to have put aside to make those things happen.

Write a single page that says basically: "We need x $ for our vacation this year.  We need y $ for replacing the roof.  We need z $ for our retirement fund.  We're doing THIS to make it happen."

Automate transfers and deposits and payments as much as possible - so you don't have to constantly think about "sacrificing" to meet your goals.

For emergencies or special-occasions, refer to your actual physical page of goals and needs before deciding.  You've really already decided, just be persistent and DON'T CHANGE YOUR MIND.

Remember things change - check your sheet and your plans purpsefully every year (not when you're tempted by a shiny special occasion or flailing in an emergency) and either re-affirm or modify.

Actually invest something.  Anything.  Find a good financial adviser and follow their directions, or make a 60/40 split in stocks and bonds.  Make stocks safe and VERY DIVERSE holdings.  Every year, take your gains and losses and redistribute them to keep the split at 60/40, and if possible grow the investments instead of cashing them out.  Investing works best long-term.  Anything shorter than a few years needs to be CDs instead.