The success Cycle is made up of four basic steps: Plan, Track, Compare and Adjust. Step 1 is to create a plan.
“Without a plan, you will find it difficult, if not impossible, to find your way through the maze of personal financial complexity. Few of us would consider taking a trip to a new location without first consulting a map and planning the best travel route. So it is with financial fitness. After you have created a Net-Worth Statement, you need to determine the direction you will take next. This includes carefully planning the way you will spend your money on a monthly basis.”
Planning is an important step in reaching your goals. Your personal financial plan should include monthly and periodic spending requirements. It should also include a summary of the income that you receive on a monthly basis. Your plan should be balanced with your income matching your expenditures. Every dollar should have a job, but the plan should not exceed your income. Putting this information down on paper (or in the Mvelopes Application) takes it from a wish list to an actual plan.
Contains excerpts from Applied Principle 8, Money for Life, by Steven B Smith