Your cash flow is the financial energy that supports your standard of living; your purchase of goods and services; your children education; your retirement planning; your need and desire to care for love ones and others; and your overall financial security.
To maintain an adequate cash flow in your life, wise planning is required through the setting of long term goals followed by the objectives that will lead to successful accomplishment of these goals. Your adequacy of cash flow is then determined by what is needed to complete these objectives and ultimately reach your long-term goals.
Realizing that the objectives are stepping stones to the long-term goals, your chance for having a successful plan is greatly increased when you can answer these five questions with clarity.
1. Where am I?
Your current status must be reviewed which will include knowing the source, amount, and projected duration of your current income. Also, do you have money left over each month after paying the bills? Do you end each month in the red? What assets do you own that is generating income to contribute to your monthly disposable income? Careful attention and thoroughness to answering the question – Where am I? – is a good reality check.
2. Where do I want to go?
Setting a goal gives direction, destination, and quantity or intensity to your activity and behavior. Also, reveal the rationale for your goal. Set your goal high enough so that it will invoke a challenge to make a difference in your life. For example – double your income, or generate an alternative minimal income stream of $5000/month or more, or start a business that you can operate spending 10 hours/week, or complete an advanced degree or training.
3. When do I want to get there?
Always estimate a time to succeed; otherwise, this effort will often settle to the bottom of your priority list. For long-term goals, three to five year periods are practical time intervals. Another important and often overlooked effect of not establishing a time for completion is the unchecked anxiety that is generated from procrastination.
4. How do I get there?
Determine your personal resources and your pattern of spending. An easy way is to calculate your surplus funds at the end of the month, and determine if your present source of income will continue and sustain you during your period of focus activity
5. What do I need to get there at the projected time?
You may need to get certified, reorganize or eliminate debt, change your location, obtain a loan, or form different relationships. This is also the time to consider having a mentor for experienced counseling, to give an objective view, and to have accountability.
When you address these steps, your efforts are now focused on finding the best way to succeed within the time allotted. You now have the chance to put together a credible plan and engage support from those who are around you.
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