P. A. Williams - Financial Behavior Modification Starter Guide: A Simple Guide to Managing Your Finances

ISBN: 9781483530055

Im not an accountant, a lawyer, financial advisor, a tax expert or any other professional of the legal type. This is not financial or legal advice Im offering just my opinion and life experience on personal finance, with that said this E- book contains valuable information to help you understand the essential principles of financial planning. Its purpose is also to serve as a starting point for you on your quest to a fiscally sound and healthy financial life. For detail discussions about successful financial management, also if you find this starter guide to be useful and need more indebt information about personal finance please purchase my book, titled Financial Behavior Modification, which will be released on June 30, 2014. Also visit my website, www.fbm365.com for updates and more information on the concepts and principles of Financial Behavior Modification.

Thank you for your support. I am forever indebted to you for your kindness and for you I am eternally grateful.

THE PLAN

The angle that I will take will be strategically positioned and based on Financial Behavior Modification (FBM). FBM involves making personal changes and assuming personal responsibility for your financial future. It is a common sense approach. This essential guide will help you to develop a well laid-out plan and behavior changing strategies. Personal finance is more about behavior and less about numbers or math.

DEFINE FBM

Financial Behavior Modification is a change in personality or attitude based on new information and experience. Financial Behavior Modification is also a technique to improve financial behavior in everyday life. The unpleasant truth is that making a behavioral change is one of the hardest things that we can set out to do. If change was easy and painless, you would see a lot more successful and happy people walking around. Accepting responsibility for your finances will not be easy. However, it will be truly worth it in the end.

To achieve financial success, you must first change your behavior. You must make a Financial Behavior Modification. You must also have a financial plan. Governments and corporations (small to large) use some type of financial plan to operate successfully. They use this so that they can track what money is coming in and what money is going out.

HOW, WHAT AND WHY

How to get out of debt?

What can you do when you get out of debt?

Why get out of debt?

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FINANCIAL BEHAVIOR MODIFICATION

FIRST THINGS FIRST

Since you have decided to make a change in the financial aspects of your life, lets take a closer look at the Ten Principles of Financial Behavior Modification. We will use the ten principles to lay out a plan to build a strong financial foundation for you and future generations.

The first principle states that you should Lay Out Short-Term, Midterm and Long-Term Goals. You will need to set your short, midterm and long-term goals. It is imperative to use a well-designed process to help you set clear and achievable goals. To facilitate this process, we will use the S.M.A.R.T method for developing goals.

S .M. A . R . T

S.M.A.R.T, is an acronym formed from the initial letters of the words Specific, Measurable, Attainable, Realistic and Timely. In order to achieve financial success, your goals must have all of these attributes. Lets break each one down.

Specific- Your goals should give you a What , Where and Why . You must define what you will do, as well as your desired result. For example, a short-term goal would be as follows: Starting next month and ending in November, I will increase my contributions to my XYZ Bank savings account by $100, in order to fund my Christmas gift-giving activities.

Measurable - Goals must be measurable to ensure success. If goals are not measurable, you cannot track your progress. Goals set successfully will always answer the question, How can I measure my success? In the previous example, you can measure how much can be saved by calculating how much money you would accrue if you began contributing an additional $100 monthly until December.

Achievable - Goals must be achievable. When creating a goal, ask yourself whether you have the resources to achieve the goal. In the example given, it is necessary for you to determine if it is possible to increase your savings by $100 a month. Do you have the financial means?

Realistic - This is perhaps the most important step in successful goal-setting. Realistic goals are practical goals. You must ask yourself Is this goal possible? The goals that you are trying to achieve must also be of great importance to you, so you can stay motivated throughout the process.

Timely- You must have a start time and an end time, so that you can stay focused on your goal and take the necessary steps to reach them. In our previous example, we gave the specific point in time ending in November as the end time and the beginning time is Starting next month.

Now that we have a goal-setting system in place, we will take a closer look at Principle Number One, Lay Out Short-term, Midterm and Long-term Goals. Short-term goals should be goals that you can achieve within the next year. A good example would be to get out of credit card debt, stop accruing debt or buy school clothes. Midterm goals should have a time frame of one year to five years. Example of midterm goals would be saving for an extravagant island vacation. It could also be saving for a down payment on a house or an automobile. In addition, it could be getting out of debt. Long- term goals should be things that you want to achieve over the next five years or longer. An example of a long-term goal would be saving for retirement or saving to fund your childrens college education.

SHORT TERM GOALS (1 year or less)

MIDTERM GOALS (1- 5 years)

LONG TERM GOALS (5 years or longer)

GATHERING PERSONAL INFORMATION

Principle Number Two involves Information Accumulation. It states that you should gather your personal financial information. This is extremely important. It puts you in the perfect place to see all of your debt and all of your income, so that you can adequately plan and prepare your budget. This is also a great opportunity to determine your net worth. In essence, you will learn your financial position-from how much you own to how much you owe.

NET WORTH STATEMENT WORK SHEET

ASSETS