The Ingredients Necessary For A Healthy Financial Plan


With a new year and a new beginning who doesn’t want to have a healthier financial plan?

A Secret Family Recipe For A Healthy Financial Plan

1/3 Portion Motivation

1/3 Portion Education

1/3 Portion Perspiration

  1. Determine your financial goals.  Be sure to set an achievable timeframe for reaching your goals.
  2. Determine your first financial priorities.
  3. Add in your three ingredients – apply double portions necessary.
  4. Bake.  Depending on your situation, you many need to bake it for many, many, years.

Taste.  Enjoy.  And savor your new found financial freedom.


Motivation as a Necessary Ingredient for Financial Success

Some people falsely assume that their financial woes relate back to difficulties with math.  While a basic math knowledge is necessary to maintain your personal finances, you also need something completely unrelated to numbers – you need motivation.

Motivation is the willingness to do whatever needs to be done.  For example, a person in debt must be willing to make certain sacrifices in order to pay off debt.  However, in order for this to happen, your desire to get out of debt (motivation) must be stronger than whatever is keeping you in debt.

There are a good many math geeks who have no financial motivation.  That, my friends, does them absolutely no financial good. Motivation is the fuel for a good financial plan.

Financial Education as a Necessary Ingredient for Financial Success

No, I’m not talking about a PhD in economics.  You don’t need a Master’s degree in accounting.  But, you do need to know a few basic facts about how money works.

For example, if you were going to start investing in mutual funds there are things everyone needs to know about investing in mutual funds.  Without a basic knowledge you are likely to do more harm than good.

If you have financial motivation without financial education then you will be energized and motivated, but those things cannot compensate for a little education.  For example, you might be motivated to go get a loan consolidation to get out of debt, but that might not be the ‘best’ financial choice.

Working harder isn’t the answer.  It is using that motivation to help you work smarter.

3 ways to get an elementary financial education

  1. School of Life. The school of life may be a good teacher.  However, you will find that this is the most expensive way to get a financial education.  Moreover, the danger is that you have preconditioned yourself with ideas about money that you might need to go through a financial crisis several times before learning your lessons.
  2. Financial Coach. Learning lessons from your own mistakes is good, but wouldn’t it be better to learn lessons from others’ mistakes?  Find a person who has a healthy financial situation and ask them if they could offer you some guidance, advice, and assistance.  Note specifically that I am not talking about a paid professional.  Eventually, you might need professional financial advice, but for now just seek out a person who handles their money responsibly.  It might just be one session over lunch or it might be a monthly meeting in front of your financial paper work.  This might just be the cheapest and most effective way to learn elementary financial lessons.
  3. Read, read, and read. It is sometimes difficult for people to find a financial mentor so the next best thing is to educate yourself through books.  This list of the top personal finance books will give you a good place to start your reading.

Perspiration is a Necessary Ingredient for a Healthy Financial Plan

You’re almost ready now to be financially healthy.  You’re motivated and educated, but you still need to do one thing – work, work hard.

Far too many people want to get rich quick.  In addition, many people seek to get rich quick without any hard work.  However, you are setting yourself up for a scam if your financial plan is to try and get rich quick.

While all of us know the story of the tortoise and the hare, many of us think that it was just a fluke that the tortoise won.  If that silly rabbit didn’t fall asleep …  We think we are the exception to the rule and this type of thinking will lead to the ruin of our financial plan.  Slow and steady is a good financial approach.

You cannot bypass this ingredient.  You must be willing to work.

In my lifetime I’ve met people who are so excited about a new financial product.  They’ve sat down, done the math, and often paid the $399.00 to become part of the program.  They are super motivated, excited, and passionate.  Then, four months later they are still in the same financial situation.  They were just on a financial sugar rush.  When you see the light at the end of the tunnel, you must remind yourself that you won’t get there without a significant amount of hard work.

Creating a healthy financial plan is within reach. The savory, satisfying debt free life is within reach.  Just add the necessary ingredients – motivation, education, and perspiration.  And let it bake for … 1, 2, 3, 4, or even 5+ years, and eventually with patience, you will get to taste the joy of being in a healthy financial situation.

Photo by jamesfischer.

What other ingredients would you add?

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  1. bondChristian

    With the coming new year, this is such a timely post. Get thinking about the balance. I know I tend to focus on one to the exclusion of the others… especially when it comes to education (because I like that part). The hustle, the daily grind, is where it gets difficult.

    It’s important to note, though, that the fun part (at least for me) is only a third of the battle. Thank you for the reminder.

    -Marshall Jones Jr.

  2. Mrs. Money

    I think you’ve summed it up pretty well! I am SO excited for the New Year. Have a great one, Bob!

  3. Patrenia

    I think the main reason why so many people fail is that they are overwhelmed with information and they want it quick fast and in a hurry. Creating healthy finances does not work that way. It’s a process of successes and failures, but we’ve got to keep working to reach our goals.

    Happy New Year!!!

  4. SailboatFamily

    So close Craig! Your post is hitting an important topic, but I would suggest you change one part to make it a home run. Motivation isn’t the key, Inspiration is.

    People are motivated to do things, but as you noted, ” They are super motivated, excited, and passionate. Then, four months later they are still in the same financial situation. ” This happens because motivation comes from an external source.

    Inspiration is an internally fueled driver. One can get inspiration from many sources. I contend this isn’ t a semantic difference, but a real loci of propulsion difference.

    Motivation comes from without and can fade with time if the provider fades. Inspiration drives from within and can last as long as you do.

    Find what inspires you to achieve, not what motivates you.

    Happy New Year everyone! 2010 will be your year!

  5. Walter

    I have fallen many times to the lure of get rich schemes but know I understand the true nature of financial success. Reading, as you have suggested here works very good for me. 🙂