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Just Starting Your Personal Finance Journey? 5 Steps to Start Off on the Right Path

September 5, 2017

Are you ready to get started on your journey to personal finance success? Are you tired of your financial wandering, going in no particular direction? Are you sick of being broke, not knowing where your money goes? Well, it’s time to get going, but you definitely want to start on the right path. Here are five steps to help you map out your personal finance voyage so you can trek to success and not sail to fail.



Step 1 – Figure out where you’re at
Before you can start on any journey, you have to know where you are at. You might know where you want to go, but until you have a starting point, you can’t even start to figure out the best way to get there. It’s the same way with personal finance.
Figuring out where their finances are at is simple for some people and more complex for others. But, in a nutshell, it’s making a list of all you have and all you owe and then putting the numbers to them. For the “all you have” items, it's the value of those items, what you could sell them for, the cash to which you can convert them. For the “all you owe” items, it’s their payoff or settlement amounts. Here is a worksheet to help with this part.

Step 2 – Figure out where you want to go
Your personal finance journey is not going to look exactly like anyone else’s. We each have our own lives to live, failures to suffer and successes to enjoy. All that happens along our journey. And one of the great things about your voyage is that you get to determine (for the most part) where you want to go. Some people have a grand expedition planned with many experiences along the way. Others want to make it a little more subdued. They want their events and encounters less wild and extravagant. But wherever it is that you want to go or whatever it is that you want to do, it’s important to figure that part out. Remember, you’re not getting any younger but, hopefully you are getting wiser each day. That means today is the right day to figure out where you want to go.



Your goals may be debt payoff, affordable home buying, and college and retirement saving. But, they also could be other things. Say you want to travel the world but don’t care about owning a house. Great! That is still a goal, and can be part of your final plan.

Step 3 – Figure out the best path to get there
It’s interesting, two people can start at the same place and end at the same place. But, the stories of the paths they used to get from the first place to the last place might be completely different. Why? Because their routes and experiences were diverse.
When we are figuring out the best path for our financial future, we can learn from others, both the good and the bad. Listen to what others say about their roads, were they smoothly paved or rocky as can be. For those we don’t want to mimic, we can learn what NOT to do. But for those we do want to emulate, we need to pay attention. Personal finance is not rocket science, but details are important. They can help us make sure we have our best strategy for wherever we want to go.

Your best path should include managing risk along the way. One way to help manage risk is to have money saved for emergencies. Aim for up to six months of expenses saved. This will help to ensure that you are driving on a smoothly-paved road.

Step 4 – Figure out the stops along the way
The stops along our personal finance journey vary, depending on the choices we make. Things like marriage and children can mean lots more stopovers. This usually means that our personal finance journey is going to take longer and cost more. But, it will be more exciting and fun than it we were going it alone. One way to help make sure it is more fun and less stressful is to have a more detailed plan for those stops. Marriage and children usually mean a larger house and more education costs. Being able to cover those extra expenses is work, but worth the memories and satisfaction.

The best way to get the journey with all its stops mapped out is to have a budget. That way, there will be money available at those stops.

Step 5 – Figure out how long you are going to take to get there
I’ve known people laser-focused on “retirement”, who wanted to work only as long as it took to pile up a mound of cash. Then, get the heck out of there. They didn't spend money because they wanted financial freedom as soon as possible. They gave up a lot at the beginning to get the economic independence that they longed for.

Not everyone is so focused. But, if you have no plan for the length of your journey, chances are it will take longer than you want or expect. Having a personal retirement itinerary helps you know how long your pilgrimage might take.


There are lots of tools on the Web to help you with this, but one I like is on the AARP website. Here is a link to it. It will give you an idea of how much you need to save and how long it might take based on what your current plans are. That way, you can decide if you like the current itinerary or need to make some adjustments.

Good planning and detail ensure that your personal finance journey is a tasty tour and not a junket of junk. You have a plan to follow. That way, you can enjoy a safari of sanity and not an odyssey of ordeals.

Kansas Money Coach can help you with your personal finance plan. Even if you are out in the weeds, we can steer you back to the right path. We want to help. Let us know your questions.


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