Personal Strategic Plan

We've all heard of businesses creating strategic plans, but not so much on the individual level.  I learned a lot about strategic planning in school but have not yet had the opportunity to actually do it hands on add to that my infatuation with goals and what do you get (aside from me having too much free time)?  I want to become and stay financially secure and what better way than to sit down and really look at my financials in what I call my Personal Strategic Plan.

My Personal Strategic Plan included the following steps:

1. Personal Assessment: What is not making you happy? How can you be happier?
2. Write down goals for the next 12 months
3. Write down goals for the next 5 years
4. Get a very clear overall financial picture
1. Find all account balances and write them down
2. Find your bills and write down monthly/yearly charges
3. Look for areas that you want to improve (pay down debt, save more money, etc)
4. Create a budget
5. Required Action
1. Based on financials find a way to achieve your goals
2. Contact the necessary people for more information regarding their services
3. Make smaller goals so larger goals are more attainable
6. Assessment - take a look at overall picture every few weeks/months to ensure you are staying on track
1. If you are...continue
2. If not, figure out why and get back on track
3. Modify if necessary
7. Outcome - at the end did you meet your goals?
8. Continuous Improvement -
1. What did you learn during last attempt? Can you better it?
2. Do this again for the next year/few years

I am not going to lie, this is a very eye-opening experience that I think everyone should do.

Here is my plan:

1.    Personal Assessment.
I am not that happy in general.  I struggle financially so I can not always go out with friends for food or drinks. I don't take decent vacations, I bring my lunch to work daily, I try not to indulge in too many things for me.  I think about my future and wonder about a future husband and children- and wonder how I'd raise a child financially if I don't make enough money to save.  I need to plan for this in case I have to adopt a child and be a single parent.  My apartment is decent, but in the long run, this is not where I want to live.  I hate my job.  I want new friends.

2.  What are my goals?

I am a list person and tend to make goals for myself so I can be sure I eventually work on things. So this part was a little easy.

• pay off 2 credit cards
• put a little extra money into
• savings account
• 401k
• IRA
• start a new job with a higher salary - or - take a more local job and a pay cut to be a little 'happier'
• start using cash on regular basis
• some others on my goals for my 30s
• quit CM
• sell leftover CM inventory
• get out of house more
• volunteer
• second job?

3.   What are my long term goals?

• upgrade to a nicer place to live (townhouse)
• pay down debt (student loans & mortgage)
• increase savings into investment accounts
• travel
• find a husband
• have child/ren
• buy life insurance
• things on my bucket list

4.  Clear financial picture
I made a few excel sheets. The first one basically has my income/expense report. I have my income at the top and under that, I have the major categories of expenses. Then I have the 'extra' money (which was been negative since I bought my place).  Next, I took a look at all my accounts. I wrote down all the balances I owed (mortgage, student loans, credit cards, etc), the balances from assets (checking accounts, savings account, IRA, 401K, and the part of the mortgage I paid).

5.   Required action
I can't achieve my goals with my current living situation.  I realized I needed to do something drastic to change my financial picture; I knew I couldn't solve it within the 12 months, but at least what I can do would be a huge step.

Brainstorming:
1.  Get a second job.  I've put this off for so long because a)  paying $10 per hour wouldn't really help as much as I needed it to...sure all little bits help - but to not have any social life and still have debt didn't seem worth it and b) I was hoping to use my free time to date someone and travel with them, maybe start a family, etc.

2.  For the last year I've told my life coach that I needed to change my living environment. Maybe I wanted to relocate to another state, start looking for jobs that living where I am now would be difficult and what if I had to take a pay cut for a job? I felt tied down because of this apartment and I thought selling it would be a little tough right now (although I did speak to real estate agents in March).

3.  Rent my apartment, live with family

4.  Quit my job, sell/rent the apartment and move far away

5.  Continue as I am, increasing my debt, not saving money

6.  Find a rich man and marry him for his money

Action decided on:
I decided the way to achieve some goals simultaneously would best work if I rent my apartment and live with family.  While my living situation will not be ideal, now is the time I can do it.  There are both pros and cons of living with family, and after carefully outweighing them all, I decided that the pros win...I just need to wake up every morning and know I am doing it for my future. 

The biggest hurdle I see is that dating would be difficult - who wants to date someone living at home? BUT I just need to remember that 1) I still own my apartment and 2) when I marry...I will go into that relationship with less debt  3) I haven't really dated much in the last 5 years...so maybe this won't be an issue...but if it is...hopefully we can make out at his place

The rent that I will get (which will be less than my mortgage & maintenance fees) I plan on:

• paying off my two credit cards...paying off the one with the highest interest rate faster
• double what is going into my IRA each month (still no where near where I want it to be)
• double what I put into my 401k (still no where near where I want it to be)
• add more money into my savings (I'll need cash in a year to rent someplace)
• get out of the house more (as little as I can be there would be good):
• be more social - hang out with friends/go to dinner/get drinks/etc
• new activities
• volunteer
• second job?
• continue cooking/making new foods

My other goals (find new job, volunteer, and other on my 30s list & bucket list) will start falling into place.  Since I don't want to be home a lot, I will use my calendar to be sure I schedule things...to make sure I stay on track with those as well.

I am not sure what will happen after 12 months, and this caused me a lot of stress in the last few days before my decision; I was even told that I am over thinking it...but I feel like how can people not look that far in advance?  I don't want to be with family much longer than 12 months, I won't have money to buy anything else (and I don't want to do that until I know I am settled into my future - determine where my future family will live), buy an RV and travel and work crappy jobs in the middle of no-where so I can see the country, or maybe rent a place with ... dare I say roommate?  oye.  But, I am trusting everyone..and not thinking about this yet.  Just see what happens and worry later.

6.   Assessment
Of course it is too early for this, but I will continue to assess my plan every month - as I have set up my excel file for me to plug in all the numbers each month and my numbers & graphs will change accordingly.

7.   Outcome
Obviously this it too early to tell since I am starting this in November 2011.  This time next year I hope to be in a much better financial situation. This will not only help my overall mood - because I will be able to go a little more with friends, and save and pay down my debt.  Living with family will be hard, so I get to work on another goal #19 join more activities, #12 do things out of my comfort zone, and of course I'll still get to work on #17 becoming a better cook/baker. 

I will not have saved as much money as I would like since my credit card debt will take a while to pay off...but that means in the few years after, I'll be in a much better position.  I really don't know how single people survive & have enough money to go shopping, eat/drink out, etc.  I am not sure where I went so wrong.

I will update my outcome next year.

8.   Continuous Improvement
I will have to update this next year since, I am not sure what areas need improvement at this time.

My goals for 2013 will include to remain credit card debt free (until I have children this would be great!), continue using cash, and each year continue to increase how much money is put into the investment accounts.  Of course there will be other goals that I will decide to include throughout the year.

In case you are wondering how I did, check out my debt progress and one year recap