Nice going! You’ve been putting your recovery plan into action and seeing some real change. Now it’s time to reassess and continue developing your financial goals.
Developing Initial Financial Goals
Your initial plan for recovering financially from coronavirus probably won’t be perfect. It’s nearly impossible to foresee exactly how you will fare with your program. What you originally thought would be an excellent system to pay off your debt may not be working for you as well as you’d hoped. Nevertheless, it’s more important to start implementing a well-thought-out plan immediately than making sure that it’s 100% perfect on paper.
Often, you’ll only be able to notice things you need to adjust and fine-tune once you begin putting it into practice. Like we discussed in the last chapter, the key to success is action. The sooner you actualize your recovery program, the sooner you’re on your way to success.
Time to Reflect
Once you’ve started implementing your plan for one month, it’s time to look back and reassess. Go back to your financial recovery plan worksheet that you completed in Chapter 5. Sit down with the past month’s bills and receipts and fill in the “Actual Cost” column of the spreadsheet. The worksheet will auto-generate your totals, and you’ll be able to see clearly what worked for you and what didn’t.
If You’re in the Red
If you went over your budget this month, don’t panic. Like we discussed, the main thing is that you started putting your recovery plan into action – even if it’s not perfect. And now you can take stock of the issues and the successes and develop your financial goals further, so they are more realistic. Ask yourself the following questions:
- Did you spend way more money than you projected?
- In which categories of your budget did you overspend?
- Why did you overspend?
- Do you just need to be more conscious of your spending habits?
- Or was your projected budget unrealistic for that category? If you find you are really struggling to stay afloat with rent, food and utilities, consider cutting back your debt payments to a more manageable level.
- Is there another money-making or money-saving strategy that you haven’t tried yet? Plan to implement at least one this coming month.
It can be frustrating not to see fabulous success right away after making significant changes to your spending and saving habits. But just like a newly planted seed doesn’t immediately turn into a tree, recovering financially from a crisis takes time. You may need to water your seed for several months before you see substantial growth. However, that doesn’t mean that the seed isn’t growing beneath the surface.
Changing old habits is hard, and it probably won’t happen overnight. But like Winston Churchill said, “Success is going from failure to failure without losing enthusiasm.” It may take you a few months to fully develop and fine-tune your financial goals, but the main thing is not to lose your enthusiasm. Even if you don’t make significant progress in the beginning, you are building new financial habits that will undoubtedly bear fruit.
If You’re in the Green
Did you stay within your budget? Excellent work! Your initial budget seems to have really worked for you. If you’re able to finish the month in the green, still try to identify ways you can develop your financial goals even further. Ask yourself the following questions:
- How much money did you save by changing your spending habits? (You can find this figure in the “Difference” column next to each category on your budget)
- How much extra income were you able to bring in?
- Can you increase your debt repayment for the coming month? If you are very comfortable with your plan, consider putting another small sum towards paying off debts, even upping your monthly payment by 2 or 3 pounds.
- Can you increase your contribution to your savings for the coming month?
- Is there another money-making or money-saving strategy that you haven’t tried yet?
Remember, consistent action is the key, so don’t try to take on too much or set your goals unrealistically high. It’s better to work on your recovery plan at a slow and steady pace. Nevertheless, it’s good to take note of ways you could continue developing your financial goals in the future. It doesn’t have to be this coming month, but if you see you consistently have extra money at the end of the month, you may want to consider increasing your debt repayments.
Developing your Financial Goals Further
Taking stock of what’s working for you and what isn’t is crucial to developing realistic financial goals. Now that you’ve assessed your goals from this past month, take what you’ve learned and apply it to the coming month. Copy over your financial recovery plan from Chapter 5 (or download it again below) and fill out your budget for the coming month, based on your findings.
Remember to date your worksheets so it’s easy to keep track of your monthly progress! You’ll probably be more accurate in estimating your projected costs this time around. Keep these worksheets handy and repeat this assessment process at the end of every month. This will help you refine and continue developing your financial goals as you make your way towards financial independence.
- Financialmentor.com (n.d.), “Don’t Let An Economic Downturn Ruin Your Wealth Growth,” – Retrieved 28/04/2020
- Financialmentor.com (n.d.), “6 Steps To Recover From Financial Disaster,” – Retrieved 28/04/2020