Welcome to the Battle Plan Series! We are going to go through both phases of CAM’s battle plan and what each step entails. The battle plan will consist of 2 phases to getting to financial freedom.
Phase 1: S.T.E.P. – This phase will focus on understanding and evaluating your current financial situation, coming up with a personalized plan, creating a budget, saving and paying off debt.
SURVEY PERSONAL FINANCES
- Admit You Have a Problem
- Evaluate Your Current Situation: list all income sources, all debts, all expenses
- Set Some Short-Term and Long-Term Goals
TRACK YOUR SPENDING
- Track Your Spending for a Couple Weeks
- Create a Budget Every Month That Shows Where Every Dollar is Being Spent
- Get Current on Outstanding Bills
- Consider Whether You Need to Rid Yourself of Some Things (i.e. your car, your lease, the cable you don’t really need, etc.)
EMERGENCY FUND STARTED
- Small “In-Case-Something-Happens” Fund – For Emergencies Only ($1000 – $3000)
PAY ALL (NON-MORTGAGE) DEBT OFF
- Pay Off Debt
- No New Debt
- Cut Up Credit Cards
- Yes, Student Loans Go Here!
- Smallest Balance to Largest (No Not Interest Rate)
Phase 2: D.F.A.S. – This phase is where you really start building wealth by getting a full disaster savings fund together, saving for retirement and college, paying off your house and building net worth.
- 6-Months of Expenses In a Savings or Money Market Account
- 15%+ Gross Pay to Retirement
- Use Matching First, then Roth IRA
- Cash Flow or Save for Your Children’s College (Or For You to Return to School)
- Decide How Much You Want to Have Saved for Each Child
- Open a 529 or ESA
- Here Is a Great Calculator to Determine Monthly Contributions
SETTLE YOUR MORTGAGE
- Pay Off Mortgage Early
- Or Save Up for a 10-20% Down Payment and Then Pay it Off Early
Are you ready to get started on your financial journey? Let’s go to the first step in Phase 1!