A money map is just like a road map or these days, a GPS. It helps you identify your financial starting point and the route to get where you want to be. The great thing about it is that you are in control.
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Why is it important to use a money map? Well, itâs just like if you wanted to take a trip to someplace youâve never been. Without a map, route, or guide, you probably wouldnât get there. Same with a money map. Without it, you may not get to be where you financially want to be.
A money map can help you to:
·Â See what money comes in and where goes
·Â Find and plug spending âleaksâ
·Â Prepare for the unexpected
·Â Put money aside for savings goals
·Â Stay out of debt
·Â Plan for the future
So how does it work? You first need to identifyÂyour income (step one) and track your expenses (step two). Comparing the two, that is where you are (step three). Then knowing where you are, you need to makeÂchoicesÂto point you in the right direction (step four) andÂplan your route (step five). Lastly,Âfollow your route to your financial destination (step six). Sounds simple, doesn't it? The truth is, money maps aren't perfect and require adjustments. WeÂwill encounterÂfinancial detoursÂin everyday life,Âand that's ok! The important thing is that you make changes and continue on your destination.
ClickÂMy Money Map to download the worksheets and create your own money map. There are four pages to the money map. EachÂsection (income, expenses, and summary) contains three columns: current,Âchoose & plan, and actual. Use theÂcurrent column for stepsÂone thru three; use the choose & plan columns for steps four and five; finally, use the actual column for step six.Â
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Next Up:Â Step One - What Comes In?
