The Super Bowl of Financial Planning

Being from Pittsburgh means this past Super Bowl was especially meaningful to me. The Steelers winning the Super Bowl was like shooting electricity through the city. Everyone gets caught up in the excitement our winning football team generates. I don’t think I am like any regular Steeler fan though. Yes, I yelled, jumped, and swung a Terrible Towel just like everyone else, but to me the Steelers offense reminded me of how a well written financial plan works!You see, so many of the activities that a football team’s offense does relates to what will happen to you in the course of managing your personal financial plan. The offense’s goal, like your financial goal, is to repeatedly demonstrate forward progress and score. In football scoring means touchdowns. In your life that means more dollars in your pocket! Sure there will be set backs, but a good financial plan/offense will net far more dollars/yards then it loses.The Offensive CoordinatorIn football the offensive coordinator plans different strategies that will overcome each opponent the team will face. He then brings all those strategies into packages of different plays. Each play and series of plays are designed to overcome the foreseen strengths of the challenging defense and move the team forward. Additionally, he is responsible to work with the coach in creating a discipline and competence in the team that allows them to continue to excel even when the practiced plays are not working.You are the offensive coordinator of your financial plan. It is up to you to have studied and prepared for the financial issues you are going to run into during the course of your year. If you are involved enough in your financial planning you will generally have a good idea of the costs you will face in the next 12 months. Of course, there will be unexpected costs that arise, but a good coordinator has contingency plans ready for when that happens.As the financial offensive coordinator you will bring together the strengths of each “position” on the team in order to maximize your efforts. Just as importantly you will find ways to get through the “defense” whose goal is to push you back.The DefenseThe defense’s primary goal is to stop your forward progress and push you back. Just like the unexpected problems life sends you, a defense can come up with surprise plays as well and catch you off guard if you are not ready. Think about some of the things that can throw your budget for a loop. You hit a giant pothole on the way to work and it destroys the new tire you just had installed. The furnace breaks down on Super Bowl Sunday right before game time. The price of groceries and gas goes up just as your boss told you there will be no pay increases this year. You fall and hurt yourself bad enough that you can not get to work for the next 6 weeks. Unexpected events are going to happen to you.Sometimes you may think there is a supernatural force out in the world whose goal is to make you sweat. The fact is you are not being singled out but rather “life happens” to all of us at some point. The point to remember is to be prepared. If every position on your financial offense is playing to the best of their ability you will be in a much better position to deal with anything life’s “defense” throws at you.The QuarterbackAs the quarterback of your financial plan your responsibility is to follow the budget and direct the activities on the field of play so that positive gain is made and losses are kept to a minimum. Your field of play is life. As quarterback you are going to point out potential threats or opportunities so that the right amount of attention is applied where needed.The team follows the football and the quarterback will use the football to move the team forward. When the quarterback gets the football moved forward the entire team moves up to where the ball is spotted. In a sense the budget is your football because it represents your resources which you will use to move your quality of life forward.Financial First DownsJust like a good quarterback keeps an eye on the field markers you should also be looking for things that mark you progress. What markers can you use? You can keep track of savings you received in a month. Another marker could be particular dollar level in your savings account ($100, $500, $1000). Reaching these markers or easier goals indicate to you that you are moving forward. Conversely, they could also indicate if you are moving in the wrong direction and a different action is needed. You goal doesn’t have to be the end zone every time but certainly making financial first downs would be a good goal every time you have to make a purchase.The Offensive LineThe offensive line protects the quarterback from defensive players who attack him on every play. You want these guys to be big and strong because the defensive players that are gunning for the quarterback have one focus and that is to stop the quarterback from implementing the plan.In your life your financial offensive line is composed of things like appropriate insurances, preventative maintenance, warranties, recordkeeping, and planning ahead. Recordkeeping is my favorite example.I have seen so many people get in trouble over poor recordkeeping. If you don’t have something in writing you don’t have any proof to back up your claim. Whether you like it or not, it won’t matter how honest of a person you are, your good word doesn’t mean much in court. It is easy for a creditor to claim you never paid them if you can’t prove otherwise. The IRS can force you to pay more in tax if you can’t prove your deductions. Businesses can claim you agreed to less beneficial terms unless you can prove otherwise in writing.PenaltiesMany times there is a monetary “penalty” to pay for not keeping everything in writing. If you didn’t keep your purchase records you may not be able to use the warranty you paid for. You will end up paying for repairs out of your pocket. If you don’t have your insurance policies in writing you may be unaware of a benefit you should have taken advantage of instead of paying for it out of pocket. Any time you pay extra because you didn’t have something on record or in writing you are paying a penalty. The Wide ReceiversWide receivers have to be quick because there is a very short amount of time available to take advantage of the larger opportunities. They also have to be good at sensing opportunities to score big and then be ready to take them because they don’t come very often.In your life opportunities to save big or receive much more value from your purchases don’t come as often as regular sales. An example would be furniture. Furniture is a major purchase and can be very expensive. However, like seasonal clothing changes, furniture manufacturers and styles come and go. That means that furniture that was selling at a higher price yesterday could be discontinued today and selling at a much lower price since the retailer needs to get it off his showroom floor. That is your opportunity to save big on a planned furniture purchase.Get OpenThe key to this example and other similar scenarios is planning for them thus putting you in a position to “be open” take advantage of them. If you have the need and find quality furniture at a bargain price but have no money it is just a missed opportunity. That is why you plan for your needs well in advance and budget for them. If you know that you will need furniture this year, an expensive item where you could save a substantial amount of money, you should plan for that purchase. What you do know is that you will need furniture. What you don’t know is when the furniture you want will be offered at a substantially lower price. That is why you have to 1) budget enough money to make the purchase and 2) set up a system that regularly checks for the right deal.Wide receivers run out on every play looking for the big gain. However, most of the time that is not going to happen. They keep trying though and that means eventually they will score big. In your role as wide receiver you should do the same thing. Don’t run out to make a purchase with the unrealistic expectation that you will save big every time. Rather, be patient, be patient, and be open! If you keep looking you will eventually make the big catch and score!The Running BacksRunning backs are not typically looking for big yardage gains but rather focus on moving the team forward in smaller increments. That doesn’t mean that they are not as important as wide receivers. Forward progress is positive whether it is 4 yards or 20 yards at a time. There are times when the game of football is a game of inches. Those inches can make or break a team. That is why any gain is better than no gain.When you are in the financial plan’s “running back” position you are responsible to move the plan forward a little bit at a time. How does that happen? If you follow your budget to the penny I consider that no gain. You gain “yardage” when you spend less than the budget called for. How do you do that? You can do that with coupons, barter, auctions, liquidations, or sales that allow you to spend less that you had planned on. That savings moves your quality of life forward because you now have “created” more money than you would have had at the end of the month.Your PlaybookIn my life I have a “playbook” for my running back position. I call it a “bargain hunting worksheet”. On one part of this worksheet I have listed all the products I use regularly and semi-regularly. I also keep a record of the prices of each item at the stores I shop at. I take this sheet (and a calculator) with me every time I shop and just make updating it part of my shopping routine. Secondly, this record lets me know if the price I am about to pay for something is appropriate, has gone up, has gone down, or is lower at another store.This shopping playbook of mine also helps me compare sale prices. Prior to shopping I browse all the local ads online looking for deals on the things I need. When I started this practice I was naively surprised to find that some retailers’ “deals” are not really deals! When I compared their deal to the prices I had on my bargain hunters sheet I discovered the price I had been paying was still lower than the other guys! If I didn’t have that sheet I would have been strongly tempted to go buy the “deal” and ended up paying more! That would have been a loss of financial yardage!The Tight EndsThe tight ends are multi purpose players who assist others making their plays like blocking for the backs or distracting the defense away from the wide receivers. Additionally, they are available to the quarterback as another option to move the ball forward if other players are going to be unsuccessful.In my personal financial offense my family and friends are my tight ends. They are very aware of my goals to save and move my financial goals forward. They help me by serving as additional sets of eyes. They may find deals I was unaware of, like a new restaurants 2 for 1 dinner special. They may have heard about potential problems that I didn’t know about, such as a very poor and costly experience with a particular health insurance plan at work.ScoringIf you are a football fan you can relate to the excitement you feel when your favorite team scores a touchdown! In your personal life scoring a financial touchdown can be even more exciting because that is money in YOUR pocket! Scoring on the football field or in your financial plan is no small task. You need a plan. You also need each position on your offense to play hard and smart. Your job is to bring the efforts of each of these positions together in order to achieve your larger goals, most importantly of which is steadily improving the quality of life you and your family enjoys.To learn more go to

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