Every year or two, you should take the time to review your family’s financial plan and assess whether it is still relevant. There have been a plethora of changes for our family over the last several years. Because we hadn’t reviewed our financial plan since before our daughter arrived last August, it has been a topic of discussion in our household fairly often recently. So, what’s next for the Blankenships?
While much of our financial plan remains the same, some things have changed. Overall, we still aim to be debt free (minus our future mortgage). However, several things have changed for us.
Changes To Our Financial Plan
A couple of weeks ago, I updated our debt numbers here on the blog. We were pleasantly surprised with our progress. It is easy to feel like you are standing still in your debt journey, especially if you’ve been paying on a loan for years. Looking at the numbers re-motivated us in our financial journey.
However, if we want our financial plan to be successful, we need to be honest with ourselves. We don’t have all of the same goals we did four years ago when we started our planning (hell, four years ago we said we weren’t have children). A lot has changed, so changes need to be made to accommodate! Here are the things we are adding and taking away from our current plan…
- More savings – Saving money has become increasingly important for our family since adding our daughter last year. We want to be prepared for emergencies, have cash for her educations, money for a down payment on a home, etc. So, we are hoping to establish a five-figure emergency fund, open a 529 savings account, and set aside money in a separate back for our down payment. We also plan to have separate accounts for different savings (sinking funds).
- Investing – I’m not overly comfortable with the investing world, but we are educated enough to know that investing is how we become wealthy. We are going to learn more about what investments make since for our family and make them.
- Retirement – This kind of goes hand-in-hand with saving but neither of us has any retirement savings set aside (panic). I’m about to be 30 and my husband is 33. So, we need to get started ASAP!
- Debt – Pay more than the minimum on everything until it is gone. Have savings for unexpected expenses so we don’t stack up more debts.
Final Thoughts
As mentioned above, our bottom line is still the same: we want to be financially free. On top of that, we want to be able to work for ourselves and work on projects we care deeply about. Being financially free will make that possible. Having more money in savings will also help make that possible. We will have more peace of mind and, better yet, we will be setting a positive example for our little one.
Readers, when is the last time you reviewed your long-term financial plan?
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In my view, the best investment you can make is to learn how to invest. By that I mean:
First, clearly understand the difference between investing and speculating. to me there are only three real investment domains: equities, bonds, real estate. the rest is just speculation to one degree or another.
Second, pick one of those investment domains and really focus on it. pick one and develop a circle of competence in that domain. make sure you thoroughly understand it, and remember what warren buffett has said many times: “it doesn’t matter how big your circle of competence is, but it is vital that you understand the boundaries.”
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Good luck!