My Daily Thoughts


Financial Plan

A good financial plan is a road map that shows us exactly how the choices we make today will affect our future.
Alexa Von Tobel

Financial planning is simply money in and money out.

For every transaction, determine the value the transaction has for you. For money coming in, this is usually related to work so the value assigned might be very low.

For money going out, this is money that is buying something. Every buying transaction also has a value associated. If you spend $30 on a movie you will value the movie experience differently than if $30 you spend on gas.

It takes introspection and forward planning to know the value of a transaction. Your circumstances today as well as your circumstances in the future need to be taken into account. Once we take the future into account there is an uncertainty as to what the future will be. That means there is also a probability portion to the determination of value.

Saving money creates value in the future, but if the future is different than imagined, the value of the saved money could be different.

Understanding the value you create by exchanging money is the beginning of creating a budget.

A budget is a way of designing a life based on the exchange of money for value.

Live the Adventure


Share this post

Leave a Reply

Your email address will not be published. Required fields are marked *