Your Financial Road Map

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The following is the transcript of the video above, “Your Financial Road Map”. Therefore, it may be awkward to read. If you can, I would encourage you to watch the video. Automatically generated closed captioning is available on the video.

So today, you and I are going to embark on it an RV trip and I got it planned out. Let me just lay it out a little bit here for you (and we’ll get to your financial road map shortly).

So, we’re going to hop in our RV in Portland, Maine to drive across the U.S. and we’re going to go to Portland, Oregon. That’s going to be our end destination but we’ll be making some stops along the way. Mount Rushmore in South Dakota, the Grand Canyon in Arizona. Maybe you’ve got a few places that you want to go to and you can just kind of let me know right now where you want to go as well.

We’re just going to do it right now. So what if I told you though that we’re going to hop in this RV but I have no access to a GPS, I don’t have a road map, and I’m just not going to look at any of the road signs as we start kind of traveling in our RV across the U.S. So, are you still hopping in the RV with me?

[Image of RV with the appearance of you backing up] Where are you going? You’re not going on that RV trip? Why not? I don’t understand. Do you think I’m going to get lost? I’m just going to start driving but we’ll eventually get there.

So obviously, I imagine you would have backed away from the RV in that example and because you said it sounds crazy, there’s no way that you would go on a trip like that. You would not take a trip like that yourself with your own family. That sounds insane. But what if I told you that you’re probably doing that same kind of thing with your finances? What do I mean by that? We’ll get into it right after this. [Intro video]

Hey there! I’m Adam Hagerman, your financial coach and if you’re saying things like “with my income, I shouldn’t feel distressed about money”, you’re in the right place. This channel is all about helping you better understand your money, so you can use it as a tool to help you achieve Financial Freedom.

Your Money Map

And that scenario that I just gave you there in the intro, as I kind of mentioned there, I can inject your finances into that as well. Maybe Portland Oregon, that end destination, is your definition of Financial Freedom or retirement for you. All the pit stops along the way, the Grand Canyon, Walt Disney World, whatever it may be, could be you buying a house, or having children, or saving for your kid’s college education. They’re destinations in your financial journey and if you wouldn’t take that RV trip without that map, that GPS, looking at any of the road signs, why would you do the same thing with your finances?

And we’re going to talk about that today. We’re talking about financial goals here. If you don’t have financial goals you are essentially driving without that GPS. Your financial goals are the GPS of your finances. They are that guide to help get you to Financial Freedom someday, so they’re extremely important.

And just like that RV trip there are going to be wrong turns with your finances. You’re going to start heading in the wrong direction. You’re going to start going to one location and find out halfway there that you don’t want to do that anymore. Same thing applies with your finances. So, you’re going to have those wrong turns and are going to have to adjust, but you still have to have that plan in place.

Financial goal setting is extremely important and the ultimate financial goal that you should have is your definition of Financial Freedom. From the last video, we define that by saying “if money wasn’t an issue what would I do?” If that money would generate enough money that I didn’t need to work at a job that I didn’t completely enjoy anymore. what would I do with that kind of freedom?

Beyond setting your definition of Financial Freedom, you’ll be making a lot of other financial goals as well. Other pit stops in your financial journey. Some of those things might be an annual vacation or paying for gifts around the holidays so you don’t have to put that on a credit card anymore or use savings that wasn’t intended for gifts around the holidays. It could be saving for your kid’s summer camp expenses, replacing the roof on your house five years from now, the tires on your car 2 years from now, etc. There are many financial goals that you have, things that you’re going to need to do in your journey to finacial Freedom. They’ll be on that financial road map.

So goal setting is very very important in this process. You’ve got to map out your destination, the places that you want to go financially before you start doing the other things.

People think that budgeting is the first step in getting better at managing your money and it’s not. If you don’t know what the destination is that you want to go to [your financial road map], what Financial Freedom means, the budget doesn’t matter. Because you’re planning for stuff that you’re not aware of. You’re not aware of when they occur and at what junctures and how much cost might be associated with them. So that goal setting is extremely important in the beginning phases of starting to manage your money better.

And as you start to list out some of these financial goals that you have, you want to make sure that you prioritize them as well. Kind of rank them based on the places that you want to go first [if going back to that RV analogy]. The things that you want to do first. What is bigger importance? Because some things you are going to want to fund first and make sure that those are fully funded before you start working on other financial goals that you might have. So with those financial goals, make sure you prioritize them. Create that financial road map.

Financial Goals Brain Dump

Now that you understand the importance of financial goals, I want you to get started. To begin, I want you to just take a blank sheet of paper, grab one from your printer, and it can have lines on it whatever. Just grab a blank sheet of paper and take the next 10, 15, 20 minutes and do a financial goals braindump. Kind of just get everything out of your mind financially and put it on this piece of paper. Draw pictures, just put one word, put complete sentences, phrases, whatever that you need to do just to get that stuff out on a page. Because if you keep it in your mind when you don’t write it down, it’s going to be hard to access some of that stuff. You know you probably have file cabinets in your mind, but they’re going to get very very dusty if you don’t go through them periodically. So get them out of your brain on a piece of paper.

If you have a significant other and you share the financial responsibilities of a household, have them do it separately as well. Because you know you’re going to think differently about money, so you’re going to want to do this exercise in different places. As one then, you’ll come together later and combine some of those to create your joint financial road map. See what kind of overlaps.

But just take that blank piece of paper and write out everything that comes to your mind financially and we’ll talk about taking that stuff, those words and those pictures and things, and turning them into more concrete smart financial goals in a future video. And when you got some goals down, make sure you check out this video right over here to continue on the process of creating your financial goals to get you to Financial Freedom.

If you’re new to the channel, click here to subscribe to get weekly videos on personal finance. And as always, remember that you deserve Financial Freedom. Take care of your money, so it can take care of you later. See you next time!

Now get out there and take care of your money, so it can take care of you later.

Your financial coach,