[Thinker On A Rock]
Today I am going to explore the art of planning for the Fourth Quarter. You have a vague sense of the changes you want to make in the Fourth Quarter of your life but you aren't clear on how to get where you want to be. The first step is to make a plan. While money isn't the only driver in life, for any plan to work you need to know how you will finance your plan. Do you currently have a budget? If not, now is the time to create one.
I hear the groans. The sound is similar to the sounds I make when my accountant asks me to gather together the paperwork needed to file my taxes. But the reality is you need to know how much money you are bringing in and how much money is going out. Think of it as creating your own personal P&L statement. A profit and loss statement is the report used by small business owners to track how their business is doing. If you have been running your financial life like a well oiled small business then your personal P&L will be worthy of a gold star. If not, it's time to bite the bullet and find out where you really stand.
There are multiple personal finance software packages that help you categorize and track spending as well as pay bills and manage investments. If you aren't using a program such as Quicken, I would encourage you to consider that for the future but for our purposes today, lets stick with simple pen and paper. You don't want the process of gathering this information to overwhelm the goal.
For one month, you will keep a spending log. I would suggest an inexpensive steno/memo notebook and pen but if you are an app person, there are several available on the Internet. I can't stress enough that you need to keep this simple. In your spending log you will keep a record of your expenses. Make no judgments at this time about the money you are spending, just continue your normal routine.
An accurate spending log will show you where your money is going and help you learn what you value in life. It will be a valuable tool in helping you craft your Fourth Quarter plans and is key to understanding the compromises and trade-offs you may need to make now and in the future. Are you ready to get started on your Fourth Quarter plan?