A Financial Life Planner acts as a sounding board for people who want to experience more ease and balance in their financial life, who want their financial life to work in their favor, rather than against them.
I chose this career because I enjoy working with people and seeing them grow. I chose this career because while getting my own finances in order I learned I love personal finance! More specifically I love being confident about the state of my personal finances, and although many people share this love not everyone is able or willing to look at their finances this closely without outside support. I have friends who love treating their bodies well and can stick to balanced meals and regular exercise easily. I on the other hand have seen a fair number of nutritionists to figure out what works for me and I routinely have to motivate (bribe) myself to work out. We all have our strengths.
My own financial journey
I really grew from the process of getting my own financial life planned out. With the support of a mentor I went from not being sure where my money was going and feeling very guilty whenever I spent anything to a feeling of ease and grace around my money. I currently record every dollar I spend and pat myself on the back for enjoying my money so thoroughly. I moved away from my money hoarding tendencies to a much more balanced life. I use a cash flow budget that gives me space to enjoy the now while taking into account my long term goals. I love to tell people that I give myself a weekly allowance, and that if I wanted to I could literally burn it. All this while saving for retirement, a car, travel, and living comfortably.
It took a lot of work to get from where I was to where I am now. It all started because a friend agreed to take an hour of her time and look at how I was spending my money. She gave me a few quick tips and pointed out that only $21 of my $154 student loan payment was going towards the principal. That shocked me.
In my mind I was financially savvy because I occasionally clipped coupons always ordered the lunch special if available. Moreover, I took pride in the fact that I had paid for my BA with scholarships. After an hour with her I saw that I really had not been paying attention to my finances at all. A few weeks later this was confirmed when I realized that I only had $32 to my name after paying off my credit card bill, because as a rule I did not carry a balance. My monthly budgeting plan was to worry and hope I’d somehow miraculously spend less the following month. This was my bottom; this was when I realized that what I was doing was not working.
From there I began exploring personal finance blogs. I started off with Get Rich Slowly, dabbled a bit in the Mr Money Moustache and Dave Ramsey mindset, and then fell in love with “All Your Worth” by Elizabeth Warren, specifically the elegant simplicity of the “Balanced Money Formula”, which is a way to simplify cash flow.
- 50% Must Haves: rent, car maintenance/payment, insurance, food, min payments on debt, etc; basically, if I were to become unemployed I’d be able to live on unemployment if my life style only cost 50% of my take home income
- 30% Wants: gym membership, internet, eating out; basically, anything I could go without where I to become unemployed
- 20% Savings: payments towards debt above the minimum, retirement savings, travel savings, emergency fund savings; basically, anything that’s meant to be used in the future
I found freedom in having a balanced budget that allowed for miscellaneous life expenses. In order to drop my Must Haves to 50% I cut my cell phone bill to a basic plan and increased the deductible on insurance. After these changes I came in at a comfortable Must Have rate of 53% of my take home pay. I took a hard look at my savings and increased it from 14% to 18%, this left me with a wants budget of 29%. From there I started to relax, I started to feel that my money was my own to spend, rather than money that would be better spent sitting in a bank or paying off debt.
My hope is that as a Financial Life Planner I will support people as they go through their own journey to a healthier financial life.