Managing your money — and working toward a financial goal — is never as easy as it sounds.
Even if you have a guide (like our 17 Days to Financial Freedom), there’s no guarantee that everything will go according to plan.
You could lose your job.
The stock market could crash, right before you’re about to retire.
You could have a life-altering change; moving to a new state for a job, or having a loved one in need of extremely expensive medical help.
Those are the bad things.
There’s also plenty of good things that could happen that throw off your plan: a unexpected financial windfall, a business or job that succeeds beyond your wildest dreams, or a new opportunity that provides you with a larger financial cushion than you ever expected.
When your financial plan needs to change, it’s a great opportunity to step back, re-asses your situation, and adjust.
Here’s how.
Make Sure Your Financial House is in Order
No matter if you’re suffering or succeeding, you need to have a good grasp of what you make, what you owe, and where your money lives.
This is a good chance to re-read Day 1: Organize Your Finances.
Hopefully, most of your finances are organized (since you already did this, right?) and this is more of a mental reset so you know your overall financial picture.
Determine What’s Going Wrong (Or Right)
If your plan has fallen awry because you’re succeeding beyond your initial expectations, apply your same plan of action to your goals more aggressively: pay more on your debt, save more for retirement, and invest more in your business.
For the sake of this post, we’ll assume that things aren’t going according to plan in a bad way — you’re not saving as much as you should be, you’re spending more than you make, or you’re not able to pay off your debts.
Your first step is to recognize the problem.
It’s always tough to admit that you have a problem. It’s even tougher when you’re doing something presumably positive — trying to manage your money better and succeed financially.
You have to recognize the problem. Say it out load. Write it down. Come to grips with it.
Focus On The Problem – and Nothing Else
There’s plenty to do when managing your finances. When you have a problem and need to adjust your financial plan, focus only on fixing that problem — and not worrying about anything else.
If you’re spending more than you make, determine what you can cut. Find ways to make more money. Do anything you can to re-arrange those numbers so that your income is greater than your expenses.
If you’re not able to pay your debts, figure out how to make them more manageable. Consolidate them. Cut your spending and move that money toward debt payments. If necessary, take out a small loan online to cover you while you figure out long-term payments.
If you’re not saving enough, pay yourself first. Consider you the most important bill to pay, and re-work your spending around that.
Once You Have the Problem Under Control, Re-Build Your Plan
Your new financial plan should only be created once you’ve solved (or are on your way to solving) your current issue.
Create a balanced budget – give every penny a purpose. Set your short-term goals. Set your long-term goals. Automate, automate, automate.
Rarely does any plan — let alone a financial plan — go off completely without a hitch. At some point, you’re going to have to change course or, more likely, pause what you’re doing and fix a problem before you can move forward.
You can do it. You just have to make it happen.
