Why You Should Write Your Personal Finance Executive Summary Today

An executive summary is an important part of most business proposals.  A proposal should contain a detailed step-by-step roadmap that shows the detailed steps and costs that need to be undertaken in order for whatever it is that is being proposed to be successful.

One key element of that is the Executive Summary.

Chances are the person that is going to end up making the final decision on a big project is an executive who has many things going on, and won’t have time to read every little detail.  It’s important to summarize the entire proposal into an Executive Summary.

This should be a couple of paragraphs summarizing:

  • Where do things stand today?
  • Why does something need to change?
  • How do we plan to make the change?
  • What is needed to get there?

Everything is kept very high level, but the key is that it summarizes everything concisely so that if an executive has only a few minutes, they’ll be able to understand what it is that’s being proposed.

I think it’s important to have a personal finance executive summary.  Do you have one?

Your executive summary should spend a couple of sentences on where things stand today.

Example: We have a net worth of $xxx dollars, the main highlights of which are an investment fund and retirement fund.  We have mortgage debt, student loan debt, and credit card debt.

Then move onto the goals that you are looking to achieve.

Example: Our immediate goals are to eliminate 50% of our credit card debt and save an emergency fund totaling $3,000 by the end of next year.

Address how you plan to make the change and how you plan on getting there.

Example: We will increase our debt payments by applying next year’s salary increase towards extra debt payment, as well as avoiding adding any items to the charge card.  We will set up an automatic direct deposit of $50 per paycheck towards building an emergency fund.

With just a few simple paragraphs, you’ve set out a clear path for your financial path in the near future.  You can then use this as a basis to draw a more detailed plan that might include budget cuts across some categories like cable TV or cell phones.  But, with this ‘executive summary’, you’ll have something to go back to every time that you are thinking about making a major (or even minor) financial decision.

Store it on your smart phone and look at it when shopping.

Look at it every time you get a paycheck or calculate your net worth.

Refer back to it when you’re paying a credit card balance.

Something very simple and very easy to put together can end up being a big stepping stone to a better financial path.

Have you written your personal finance executive summary?  If not, what are you waiting for?

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3 thoughts on “Why You Should Write Your Personal Finance Executive Summary Today

  1. We haven't written down a personal finance statement but we do have a long list of short term, medium and long term goals. We usually just operate off that list

  2. Written plans and goals are fantastic if only for the act of planning, which helps a person to see where they need to place their most important resources. Without a plan, it's hard to have that kind of focus and definitely hard to reach long term goals!

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