4 Benefits to Having a Financial Plan

Money can be a taboo topic, yet, we all think about the need to have a plan for our money. Few seem to make it happen. In a recent 2018 study by an investment company, Charles Schwab, it was discovered that 3 in 5 people are living paycheck and only 1 and 4 people have a written financial plan. I would suggest it is not surprising to discover that more than 50% of people are living paycheck to paycheck when only 25% have a plan. Having a financial plan is an absolute game changer. Here are 4 benefits.

1) Maximize the use of your income and accumulate wealth.

When you have a good plan you able make your income go farther, increase your wealth and over time make your money work for you. This happens through breaking the paycheck to paycheck cycle and paying yourself through savings and investing.

2) Control your expenses.

When you have a good plan it gives you a lens which through you can make prudent spending and saving decisions. Some might say it means that it removes the opportunity for fun. I would argue just the opposite. I would argue that controlling you expenses enables fun without financial disaster, buyer’s remorse later, and anxiety that comes from a low bank account.

Living below your means by controlling your expenses will produce a much greater financial reward in the years come.

3) Reach Your Version of Financial Success.

Having a plan will be the only way you reach financial success. Each and every individual’s version of Financial Success is going to be different. However, it is important to know what you envision financial success looking like for you and then make it happen! Make sure it is your vision and no one else. If it is not yours, it will not make you happy.

4) For those that desire: the empowerment to give back. 

It can be hard to give back financially to your community, preferred charitable non-profit organization, or religious entity of choice without a plan that is keeping you thriving financially. Many people want to give back, but do not have the means to do so. Planning now will enable you to give back now and give back even more later!

If you you would like help building a plan that helps you reach financial success visit our website at wku.edu/cfs and fill out our become a client form! We look forward to coming alongside you in your journey to financial success!

Understanding a Credit Card Statement

We were going to put together an article that explains everything you need to know about a credit card statement. However, in the process of researching we found their already to be an excellent article in this area!

Check out the link to this article by thebalance.com on understanding credit card statements! https://www.thebalance.com/how-to-understand-your-credit-card-billing-statement-960246

The only important item the article from thebalance.com leaves out is the concept of the “grace period”. The grace period is the time between the end of your credit card’s billing cycle and the due date for that billing cycle. This is typically about 21 days.  As long as you pay off your card’s balance by the due date then you will not experience any finance/interest charges. If you do not pay off your balance in full by the due date then you will immediately be charged finance/interest charges. These charges will continue until you have paid your balance of in full. The interest rates are steep on credit cards. Sometimes almost 30% so make sure and pay that balance off completely if at all possible!

Make sure that before you apply for a credit card it includes a grace period for purchases! Be aware that even if a credit card includes a grace period for purchases there still might not be a grace period for cash advances and balance transfers.

As always remember the rule of thumb for using credit cards! Before using a credit card make sure you have 1) a written budget, 2) you are tracking your expenses to ensure your budget is being implemented and is realistic and 3) Spend multiple months getting comfortable with steps 1 and 2 before getting a credit card.

If you would like to read more on credit cards check out these two recent articles we recently posted “Don’t Trust The Card or Yourself Without a Plan” and “The Process for Getting a Credit Card”