Almost everyone had financial regrets last year - It's time for my third plan:
Bottom Line: If you really don't have any financial regrets from the past year...Congrats! You're literally 1 in 200! According to the latest research from GoBankingRates.com only .47% of Americans didn't have financial regrets last year. While it's great if that's you...The odds are it isn't - so let's look at what they were so we can avoid them this year:
36% not saving enough
23% Frivolous spending
11% Not investing in stocks
11% Taking on too much debt
8% Paying for college
7% Living above one's means
No surprises, really right? But what's really going to change if you don't have a plan. This is the perfect opportunity for me to break out my "a-third plan". The plan is super straight forward. It allows you to make progress across all aspects of your financial life simultaneously. The most common reason why people don't reach financial goals is not having a plan. For those who do have a plan the most common reason it isn't success is because it lacks balance and eventually life circumstances or impulsive moments blow them up. That's what the third plan addresses.
Here's the breakdown...You take a third of free cash flow and:
Save and invest a third
Use a third to pay down debt (starting with your highest interest rate debt first)
A third that goes into an account for fun stuff and extras
By doing this you'll be making consistent progress on a relative basis across all of your goals in a sustainable way. So enough with regrets. Use my third plan.