The fall foliage in New England is impressive – full of splendor and beauty. I lived in Connecticut for a few years, and the color of the fall leaves was always spectacular. However, they eventually fell to the ground, and I had to pick them up, and raking leaves is not an activity I enjoy.
To tackle this problem, I needed a plan, and as I surveyed the yard, I decided on three options.
Option 1: Do nothing and leave the leaves alone.
Option 2: Rake the leaves into one giant pile.
Option 3: Start at the front of my yard, work my way to the back, and rake the leaves into several small piles.
I chose option three. Breaking my task into small, manageable pieces allowed me to move across my yard efficiently and skillfully, and it was less daunting.
Creating a budget or developing a financial plan is intimidating for many. Like a leaf-covered yard, your paperwork may be scattered around your house – unorganized and in disarray.
Here is a guide to help you get on track and get organized.
Monday: Gather your bank, credit card, loan, investment, and other financial statements and put them into individual piles. Use manila folders and title each one accordingly to help you organize and file your documents.
Tuesday: Review your bank and credit card statements to identify where your money is going. I recommend reviewing your accounts for the past six months. Create individual categories such as mortgage, auto, food, entertainment, etc., and enter the data in Excel or write it on a yellow pad to start your budgeting process. Do you notice any trends or themes in your spending? Can you eliminate or reduce any expenses?
Wednesday. Review your tax returns, pay stubs, 1099s, W-2s, and other income-generating documents to identify your income streams. Hopefully, your income exceeds your expenses.
Thursday. Evaluate your investment statements. Write down your account values, holdings, asset allocation, dividends, interest, and fees. Do you need to adjust your allocation or make changes to your holdings?
Friday. Assess your health insurance, life insurance, and retirement benefits. Are your beneficiaries up to date? Do you have enough insurance coverage? Are you contributing enough money to your retirement accounts?
Saturday: Review your estate planning documents like wills and trusts. Do they need updating? Do you need to create one? Are your loved ones protected?
Sunday: Rake leaves.
After a week, you have your budget and financial plan. Of course, if you want guidance, contact a Certified Financial Planner™ to help you create a financial plan and get organized.
How do you eat an elephant? One bite at a time ~ Anonymous
November 11, 2023
Bill Parrott, CFP®, is the President and CEO of Parrott Wealth Management in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so our clients can pursue a life of purpose. Our firm does not have an asset or fee minimum, and we work with anybody who needs financial help regardless of age, income, or asset level.
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