Ashland June 2019

June 2019 Ashland Local Town Pages www.localtownpages.com Page 7
Your Money, Your Independence
Lists for Sun, Fun and Rainy Day Funds.
Summer brings numerous lists
of things to do and enjoy. Books
to read, coastal restaurants to try
and fun places to bring the kids.
What about lists of your expenses?
I know, it sounds as enjoyable
as a rain forecast for your
6-year old’s backyard birthday
party. However, if you’d like more
money for a rainy day, you need to
create lists within a budget.
Spending less than earnings
is not a successful budget. Positive
cash flow shows control of
the greatest variable (spending).
However, success must include
defined ranges of where expenditures
occur, to ensure you’re
saving for long-term goals and
spending on current priorities to
enjoy life.
Stack rank today’s priorities.
Evolve beyond long-term goals,
and also rank activities or services
valued most for today’s quality of
life. For example, a top priority
for dual-income families may
be outsourcing tasks (cleaning,
landscaping) to free up time on
their weekends to do family activities
or kid’s sports. This exercise
should have everyone involved,
as priorities only work if a household
commits to them. With goals
and priorities defined, now see
where money is spent.
Don’t record expenses daily.
This both unrealistic and reactive.
Instead, create a mindset
that helps with decision-making
at the point of purchase.
To do this, start with last 3
months of spending and assign
Glenn Brown
each item into one of these categories
“needs” (fixed expenses),
“seeds” (long-term goals),
“wants” (priorities) and “what
was I thinking?!” (impulse purchases).
This last category crushes
financial goals and shifts money
away from priorities. The sooner
you identify these, the less likely
to repeat.
Differentiating “needs” versus
“wants”. Housing, food, utilities
are your “needs” while “wants”
is your stack ranked priorities.
Some items get split across both
“needs” and “wants,” like a $65K
vehicle when a $30K vehicle satisfies
transportation needs. Also,
allow for some cushion in your
“needs” allocation for the unexpected,
like a new roof.
Follow a 50/30/20 rule with a
twist. Put 50% of your income
toward “needs,” 30% to “seeds”
and the remaining 20% against
“wants.” The twist being if you
desire financial independence
over retirement at 65, push
your “needs” down to at least a
40/40/20.
The opinions voiced in this material
are for general information only and are
not intended to provide specific advice or
recommendations for any individual.
Glenn Brown is a Holliston resident
and owner of PlanDynamic, LLC,
www.PlanDynamic.com. Glenn is a
fee-only Certified Financial Planner
helping motivated people take control of
their planning and investing, so they can
balance kids, aging parents and financial
independence.
Established in 1974
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