Financial Planning for the Rest of Us: Simple Steps to Get Started
Why Financial Planning Felt Impossible (At First)
Okay, let’s be real. Financial planning? It used to sound like something only rich people did, or at least people who knew what they were doing with their money. I definitely didn’t fall into either category. I was just trying to make rent each month, juggling bills, and vaguely hoping for the best. Honestly, the whole concept felt overwhelming. Budgets? Investments? Retirement accounts? Ugh, where do you even start? For years, I avoided it. Plain and simple. My strategy was basically crossing my fingers and hoping things would magically work out. Spoiler alert: they didn’t. Not really. I mean, I was getting by, but I wasn’t actually building anything. I wasn’t moving forward. It was more like treading water. And the constant low-grade anxiety about money? That was just… exhausting. So, something had to change.
My First (and Embarrassing) Attempt at Budgeting
So, here’s a funny story (well, funny now, not so funny then). My first attempt at budgeting was, well, a disaster. I downloaded some fancy budgeting app, convinced I was finally going to get my act together. I meticulously tracked every single expense. Every coffee, every bus ride, every pack of gum. I was determined to be perfect. And that was the problem. I was trying to be *too* perfect. After about two weeks, I was completely burned out. I felt restricted and deprived. Every little purchase felt like a failure. I ended up deleting the app in a fit of frustration and ordering a pizza. Whoops. Looking back, I realize I was trying to completely overhaul my spending habits overnight. That’s just not realistic. It’s like trying to run a marathon without training. You’re just going to crash and burn. The key, I learned later, is to start small and make gradual changes. Baby steps, people, baby steps. If you are interested in investing, start there with a small amount.
Small Wins: Finding Simple Financial Planning Strategies
The thing is, I didn’t give up entirely after the budgeting fiasco. I just knew I needed a different approach. One that was less restrictive and more… realistic. That’s when I started focusing on small wins. Instead of trying to track every single penny, I started by tracking just my biggest expenses: rent, groceries, transportation. Then, I looked for ways to cut back in those areas. Could I find a cheaper apartment? Could I cook more meals at home instead of eating out? Could I bike to work instead of taking the bus? These small changes added up over time. I also started automating my savings. I set up a recurring transfer from my checking account to my savings account each month. It wasn’t a huge amount, but it was something. And the best part? I didn’t even have to think about it. It just happened automatically. It’s kind of like setting up autopay for your bills, only instead of paying someone else, you’re paying yourself. Who knew financial planning could be so… easy? Well, not *easy* exactly, but definitely less intimidating than I originally thought.
Understanding the Basics: What Are Assets and Liabilities?
I know it sounds incredibly basic, but once I understood the difference between assets and liabilities, something clicked. Assets are things that *make* you money, or have the potential to appreciate in value. Liabilities are things that *cost* you money. For example, a house is generally considered an asset (hopefully it appreciates in value!), while a car loan is a liability. Credit card debt? Definitely a liability. The goal is to accumulate more assets than liabilities. Sounds simple enough, right? But it’s easy to get caught up in accumulating liabilities without even realizing it. Think about all those subscription services you’re probably paying for. Are you actually using them? Or are they just draining your bank account each month? Honestly, I was surprised to see how many subscriptions I had that I wasn’t even using anymore. Streaming services, gym memberships, online courses… it all adds up! Cutting those unnecessary expenses was a surprisingly effective way to free up more money for savings and investments. Another win!
Investing: Don’t Be Afraid to Start Small
Okay, investing. This was the really scary part for me. I always thought you needed a ton of money to get started. And that you had to be some kind of financial genius to understand it. But I was wrong. You can start investing with just a few dollars. Seriously. There are plenty of apps out there that let you buy fractional shares of stocks, meaning you can own a small piece of a company even if you can’t afford a full share. I started with Acorns, which automatically invests your spare change from everyday purchases. It’s not going to make you rich overnight, but it’s a great way to get your feet wet and learn the basics of investing. I also opened a Roth IRA, which is a retirement account that allows your investments to grow tax-free. It’s a bit more complicated than just using a micro-investing app, but it’s worth it in the long run. Especially considering the way things are going with Social Security. I stayed up until 2 a.m. reading about Roth IRAs on the IRS website, and honestly, my brain felt like scrambled eggs, but the info was worth it. Don’t be intimidated. Do your research, start small, and don’t be afraid to ask questions.
Mistakes Were Made: Learning from My Financial Blunders
Of course, I’ve made plenty of mistakes along the way. Remember that time I tried to day trade based on tips I read on Reddit? Yeah, that didn’t end well. I lost a couple hundred bucks in a matter of hours. Ouch. Lesson learned: don’t take financial advice from strangers on the internet. Also, I totally messed up by selling some stock too early in 2023. I panicked when the market dipped and sold everything at a loss. Turns out, that was a terrible decision. The market rebounded shortly after, and I missed out on some serious gains. The key takeaway is that mistakes are inevitable. Everyone makes them. The important thing is to learn from them and not repeat them. And to remember that investing is a long-term game. Don’t try to get rich quick. Focus on building a solid foundation and staying patient.
Financial Planning Isn’t Just About Money (It’s About Peace of Mind)
Honestly, the biggest benefit of financial planning hasn’t been the money I’ve saved or the investments I’ve made. It’s been the peace of mind. Knowing that I’m in control of my finances, that I’m building a better future for myself, that I’m not just treading water anymore… that’s priceless. I still have a long way to go, and I’m sure I’ll continue to make mistakes along the way. But I’m no longer afraid of financial planning. I’ve learned that it’s not some mysterious, complicated thing reserved for the wealthy. It’s something that anyone can do, no matter their income or background. It’s simply about making smart choices and being intentional with your money. And who knows, maybe one day I’ll even be able to retire early. Okay, maybe that’s a bit optimistic. But hey, a girl can dream, right? If you’re as curious as I was about early retirement, you might want to look into the FIRE movement… but maybe don’t quit your job just yet! Start small, be patient, and remember that financial planning is a journey, not a destination. And, perhaps most importantly, don’t be afraid to ask for help from financial advisors or reliable sources. There are tons of free resources online.
What’s Next? Continuing the Financial Journey
So, what’s next for me? I’m continuing to learn about different investment strategies, exploring real estate investing, and thinking about how I can generate passive income. I’m also working on paying off my student loans, which feels like climbing Mount Everest, but I’ll get there eventually. I plan on diversifying my investments, taking on more calculated risks, and learning more about how to protect my assets. I will definitely need to consult with a professional about that. Who even knows what’s next with all this inflation going on? The key is to keep learning, keep growing, and keep moving forward. And to remember that financial planning is not a sprint, it’s a marathon. With plenty of hills, roadblocks, and unexpected detours along the way. So, buckle up, enjoy the ride, and don’t be afraid to make a few mistakes. Because that’s how you learn. I hope some of my experiences were able to help you start your own journey.
