One of my friends recently decided to tackle one of his New Year’s resolutions: get his finances in better shape. He asked for my help, and I am looking forward to helping him the best I can. I started thinking on how to best help him over the week-end. He could of course read the 31 Days To Fix Your Finances series from the The Simple Dollar, or the The Wealthy Barber book; both are great resources and I highly recommend them. But I think a simpler and easier-to-grasp approach will help him a lot more in the beginning. Therefore, preparing for our first “financial-review” tonight, I started laying down a few basics.
The Big Picture
Those basics will help us draw a simple and easy-to-grasp big picture. They will guide us in defining what his goals are, what to work on, and and how to build sound financial foundations. My belief is that money management is not only about dollars and cents; it relates to one’s life goals and how money relates to them. Therefore we need to review where he wants to go and how to reach there.
Killing Two Birds With One Stone
I will post those rudiments over the next week in a series of posts named “The Basics of Personal Finance in 7 Days”. I will write a post per day, each describing a single step. As soon as a post will be live, I will add links to it here; so if you want to save them and have simple access to all of them, just bookmark this post.
Day 1: Assess the situation - Open your eyes
Day 2: Define and refine your goals – Where to go
Day 3: Track your spending - Where did it disappear to?
Day 4: Set up a budget - Your Treasure Map
Day 5: Get out of Debt - Fight for independence
Day 6: Emergency Fund & Insurance - Safety First
Day 7: Invest - House, College, Retirement, etc.
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