Author: Heather Vale
December 19, 2023
Financial planning makes you the hero in your own journey as you map out how to find a treasure for your future.
If you’re like many beginners, the thought of learning something new — especially something complicated, like managing your finances — can be a little nerve-wracking. That might cause you to either procrastinate altogether or rush ahead without thinking it through.
Luckily, some financial literacy and planning tips for beginners will help you navigate the jungle of complex economic processes to emerge victorious on the other side.
Financial planning is pretty much what it sounds like: planning your finances to reach your short- or long-term financial goals.
If you didn’t enjoy math in high school, this might not seem very fun. But it’s not just math. It’s money. And money is cool.
In fact, financial planning can be an exciting adventure. It involves looking at how much money you have, deciding what you want your future to look like, and mapping out how to reach your goals.
You become the hero in your own journey. You’re Luke Skywalker taking on the evil Empire, Dorothy finding her way back home from Oz, Harry Potter fighting that guy we can’t name, or Neo coming to terms with The Matrix.
Now it sounds like fun, right? OK, lace up your boots, grab your lightsaber, and let’s start exploring that financial jungle.
A successful journey requires following a proven path. There are five basic steps to the financial planning process.
First you need to figure out where you’re starting from, which in the classic hero’s journey is called the “ordinary world.” This is your current financial situation, including how much you make each week or each month, and how much you need to spend on food, housing, and other necessities. Subtract your expenses from your income to figure out what you’re working with.
You’ve now got the framework for a budget. This is something many people dread, but every financial planner recommends as being crucial.
In the hero’s journey, this step is the “call to adventure.” Don’t worry if you’re unsure because every hero goes through “refusal of the call” where they’re reluctant to change. But once you get past that, things can become pretty exciting.
Once you know where you are and where you want to be, you can figure out how to get there. This includes identifying and evaluating various courses of action. Do you need to pay down your high-interest debt, or create an emergency fund? What about starting a retirement account or a diverse investment portfolio?
At this point, a hero is “meeting with the mentor” to overcome their trepidation. Whether that’s Obi-Wan Kenobi in Star Wars, Gandalf in Lord of the Rings, Dumbledore in Harry Potter or Morpheus in The Matrix, these teachers guide the novice hero. So think about using a financial advisor to help you map out your journey.
A mentor can show you the way, but you as the hero in your own journey need to make it happen. There are many different paths to success, so choose the options that make sense for you. You’re now “crossing the threshold” of the hero’s journey, ready to face what lies ahead.
To get into the nitty-gritty of your financial plan, you’ll want to consider your risk aversion. Higher-risk investments can lead to higher reward (or total loss) while lower-risk investments and deposits are safer but have less potential for profit.
You’ll run into roadblocks, tests, and other challenges on your financial journey. If you lose one battle, you learn what not to do next time.
Luke Skywalker failed many times while learning to use The Force. Neo failed while getting used to The Matrix. It’s OK as long as you review what went wrong, make adjustments and revisions if needed, and continue on your way. There will come a time when you “seize the sword” and reap the reward.
Did you pay off your student loan or credit card debt? Add to your emergency fund? Increase your contributions to your retirement fund? Stay motivated by celebrating these milestones and successes when they occur.
Everybody’s journey is different, but there are six types of financial planning to consider in yours.
Financial planning lets you create a brighter future that fits your personal goals. Eventually, the hero of our story always returns with a “magic elixir” or new knowledge that boosts their confidence and gives them a new outlook on life. This is what financial planning can do for you.
The hero’s journey might be a suitable metaphor for how the process works, but this is more than just a Hollywood blockbuster or riveting adventure novel. It’s your life, and you deserve for it to be the best it can be.
Many people put off financial planning because they find it too complicated, too scary, or too much trouble. But now you know it can actually be a fun journey, full of challenges, revelations and triumphs.
The right investments, decisions and plans can go a long way toward crafting your vision of the future. So go ahead and put on your hero hat, cross that threshold, face your fears, and come back with the magic elixir of financial planning success.
About the author:Heather Vale
For over a quarter of a century, Heather has been working as a journalist in all media: TV, radio, print, and online. After establishing her career in Toronto, she has been living, working, and playing in Las Vegas for the past decade. She loves pulling apart complicated topics to make them simple, fun, and easy to understand, especially in the business and financial niches. But she also enjoys writing about the personal side of life, including success, relationships, families, and pets. She approaches everything from a yin-yang perspective, so her passion for wordplay and entertaining metaphors is always balanced with an intense (and some would say annoying) focus on facts and accuracy.
This material is for informational purposes only and is not intended to replace the advice of a qualified tax advisor, attorney or financial advisor. Readers should consult with their own tax advisor, attorney or financial advisor with regard to their personal situations.
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