Planning

Planning is one the most important aspects of getting the most out of the money we have. Making sure that I have a clear idea of what my goal is allows me the opportunity to look at multiple ways of getting there. It doesn’t matter if it is something small like replacing my current model Iphone with a newer model, or something large like purchasing a car; planning shows me how to reach that goal with the lowest cost possible to our bank account. It does require time, patience, and LOTS of research. Understanding how much airfare, hotel, ground transportation, and entertainment costs in 2020, gives me a clear picture of the savings I need to make so that we can realize that same exact trip in 2021. This approach allows someone to see the prices of everything involved which in turn gives them time to prioritize the different aspects of the trip to fit their budget. Another advantage of this advance planning is that I have over a year to begin saving our airline or hotel points to cut down our overall costs for the trip. The other nice benefit to this strategy is that it reduces the trip planning stress since you aren’t under the gun to book something last minute or just a few months in advance when most of the best accommodations, flight options, and rental cars are no longer available and prices are higher. Planning for a car or an expensive home improvement well in advance allows us to shop around, get a price point, and plan our budget so that we can avoid borrowing money for the big purchase. By delaying the instant gratification of buying now, when we can’t pay cash for it, thus taking on interest or loan payments, we are really setting ourselves up to maximize our income dollars. For example, if we buy that car that we really want/need today, and we don’t have much to put down, the overall price will be much higher than if we just figure out what that model car costs, plan out how much to save each month in order to buy it with cash. The real bonus here is this: by delaying our wants through economic discipline, we have now freed up thousands of dollars of OUR money that would have gone to interest payments-with nothing to show for it that we can now use to invest or to pay for something else in cash that might have required us to borrow/pay interest on such as furniture or credit card bills. Very early on in our marriage, Jodi and I committed to not having a car payment. That was huge because it allowed us to make our money work for us instead of holding us back from our goals. Planning: it’s always important to know where you want to go so that you can figure out the route on how to get there.