Financial planning is a subject that wasn’t taught very much in school and most of us have to learn it the hard way. It is not about how much money you have that matters, it is how you keep and managed your money. Sound financial knowledge is crucial for achieving financial success.

We taught that we are an expert on this subject but when we have it then only to find out how ignorant we are about it. We have spent all of our life looking for it and yet foolishly loose it. Here is a true story.

Evelyn Adams won the New Jersey lottery not just once but twice (1985 & 1986) amounting to US$5.4 million. Today, the money is gone and Adams lives in a trailer.

“I won the American dream but I lost it, too. It was a very hard fall. It’s called rock bottom,” says Adams. “Everybody wanted my money. Everybody had their hand out. I never learned to say “NO!” “I wish I had the chance to do it all over again. I’d be much smarter about it now,” says Adams, who also lost money at the slot machines in Atlantic City.

“I was a big time gambler,” admits Adams. “I didn’t drop a million dollars, but it was a lot of money. I made mistakes, some I regret, some I don’t. I’m human. I can’t go back now so I just go forward, one step at a time.”

“A fool and his money are soon parted” - Thomas Tusser

I have been following some very simple financial steps in achieving my financial goals. It is base on the concepts of paying myself first, then I will divide the balance in a certain percentage for others necessities and commitments. I may consolidate some of my loans if necessary to save on interest payments. Compare credit cards promotions and you may convert your outstanding balance into secured loans which can help you to save on the interest charged.

This year is no different, my financial plan for 2008 is rather simple, it is a “save and wait” strategy. All my existing incomes will be divided accordingly for the following:

Savings 20%

Mortgage and investments 30%

Automobiles Expenses 15%

Family Expenses 20%

Bills 15%

It is important to adjust your allocations accordingly and the 20% savings is not negotiable. I have been using this simple financial planning system and I have managed to obtain desirable results. You’ll have to stick to it to make it work and I have managed to purchase a few properties over the years.

I am also expecting additional incomes from my options couching, my 2 books releases and hopefully from blogging. These additional income will not be use to make any extravagant lifestyle enhancement purchases but to save and to reduce some of my loans and mortgages as this year is likely to hit recession following the US. I will then be ready when any investment opportunities come by.

“Money is better than poverty, if only for financial reasons”

- Woody Allen

Related Content

Subscribe to the post comments feeds or Leave a trackback