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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Monthly Goals – Review and New Ones for October

Let’s review the goals I set for September and see how I did:

  1. Continue to work out – Mostly accomplished – I was doing great up until my wisdom tooth surgery.  I haven’t gotten back into it yet, just because my recovery has taken a bit longer than expected, but I am gearing up to get back into it full swing next week pending doctor approval.
  2. Recover from wisdom tooth surgery – Mostly accomplished My surgery for extracting teeth was rather complicated, and as an update to my post, I had a further complication last week when a small hole appeared between my sinuses and one of the extraction sites.  The surgeon was fairly confident that this would heal on it’s own.  I’ll find out more next week.  So far it seems to be doing well, and I’m back to eating all but really crunch foods.
  3. Figure out what to do with my MY money – Somewhat accomplished – As I mentioned, I bought a pair of running shoes with money that my parents gave me for my birthday to spend on myself.  I still have some left, but am in no hurry as I don’t want to spend just for the sake of spending, but would rather wait until something truly important comes along.  In any case, the money is earmarked accordingly.
  4. Sell a car / buy a car – Not accomplished – Again, I’ll blame the wisdom teeth. I have a few small things I need to get straightened out, as well as do a thorough cleaning.  I’m moving this to October.
  5. Do good in my fantasy sports leagues – Accomplished – I had dropped from first to fourth in my baseball league, but am now at second.  Either second or third is likely for me, and that will ensure me some prize money.  I also started off 2-1 in my football league, so I can’t complain.  This week might be brutal, though, as I’ve got a double whammy of injuries and bye week players that are leaving me no choice but to field a bunch of scrubs. 
  6. Get caught up on insurance co-pays – Accomplished – Everything is finally caught up with the bills from Baby Beagle’s delivery.  I also had an issue to work out with regard to coverage for Baby Beagle’s immunizations that was straightened out.  Even the oral surgery bills are pretty much finished off, except for one claim that I’m expecting to run through any day.  

October Goals

  1. Get back on the treadmill – By the end of the month I should be fully back into the workout routine unless something really creates a setback with the wisdom teeth removal.
  2. Sell a car / buy a car – I’m moving this one up a month and see no reason that it can’t happen.
  3. Winterize around the house – Some of the windows need re-caulking and I’d like to have the furnace tuned up to make sure everything is running efficiently.  
  4. Donate – I have stuff that needs to be donated that has been with us for way too long.  Getting rid of those piles in the basement and the garage will help get those areas clean, and hopefully help others that can use the items.  
  5. Figure out our Netflix plan – Right now, we’re on the $4.99 minimum plan where you get two movies per month.  We’ve actually now gotten into a habit where we like to watch a movie on Saturday night.  So, this leaves us two or three movies short per month.  I am convinced that our library has a decent enough selection where we could supplement our Netflix rentals with free library rentals, but my wife is skeptical.  We need to go check it out and determine if we can stick to our current Netflix plan or if we will need to bump back up to the next highest plan ($8.99) that would allow us to watch a movie a week.

Happy autumn!

  

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September 2009 Goals

Here are some personal and fiinancial goals for the month.

  1. Continue to work out – I’m in my fourth week of getting up five days a week (before work) and exercising on the treadmill.  I need exercise.  I love exercise.  I love working out on the treadmill, but working out in the afternoon / evenings wasn’t getting it done because there was never opportunity to get into a groove.  Just too much going on.  So, I had to overcome the fact that I hated getting up in the mornings to workout and actually do it.  After about the second week, I stopped hating the alarm going off, so I think I may be over the hump.  
  2. Recover from wisdom tooth surgery – OK, so I haven’t had it yet, but it’s scheduled for later in the month.  
  3. Figure out what to do with my MY money – I just had a birthday and my parents gave me a little bit of cash, with the stipulation that I spend it on myself and something I enjoy.  I think sometimes I get so caught up in saving money or applying any extra money to a particular ‘goal’ that I forget what it’s like to go out and do something nice for myself.  So, I am putting the money aside and thinking of what to buy with it.  
  4. Sell a car / buy a car – With Baby Beagle, the two cars we have aren’t ideal.  My parents have agreed to sell us a slightly larger vehicle, so now I have to get that in motion.  Get my car ready to sell (mostly cleaning), sell it, and then go through the purchase of the car with my parents, as well as all the plate transfers.  I would love to have this all done by the end of the month.
  5. Do good in my fantasy sports leagues – I’m currently in a dead heat for first place in my baseball league.  I should, barring anything crazy happening, finish in the top two (first would be nice as I am the defending champ), which will net at least $100 in winnings, so I just need to monitor that.  In addition, some of my buddies and I had our fantasy football draft last night, and I’m hoping to get things going on the right foot there, as well. 
  6. Get caught up on insurance co-pays – We are still getting bills for things associated with the birth of Baby Beagle, which took place back in May.  Every time I think that we’re done, it seems another bill finds our mailbox.  For most of the summer, it seems not a day would go by that we wouldn’t get either an Explanation of Benefit statement or a bill.  We only have one bill outstanding, which I need to call on to get an understanding of what it’s for (since I thought we had already paid up), so I’m keeping my fingers crossed that we can cross off everything to do with paying for the delivery from the list.

None of this seems outrageous, so I’m hopeful I can get everything done.

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Mid-Year Review Of 2009 Goals

It is amazing to me that 2009 is half over, but here we are beginning the second half of the year. Wow!
I thought it would be a great time to take a look at the financial goals I set at the beginning of the year and see where we stand:

  1. Pay regular payments on the mortgage. Admittedly this was sort of a gimmee, but we’ve Achieved Goal and On Track for success throughout the year.
  2. Avoid double digit declines in housing value. Unfortunately, we’re down 11% for the year and the Detroit market will need a lot of time to recover. So we have Not Achieved this goal and I can safely say we are Not On Track for the year.
  3. Sell my car and purchase a new family friendly car. We have Not Achieved this goal but I believe we are On Track for something to happen by the end of the year.
  4. We hoped for a 10% increase in the value of our mutual funds. So far, the market has been kind so we have Achieved Goal, but it’s Too Soon To Tell if we will meet this goal for 2009.
  5. Long Term Savings – We have avoided any unexpected outlays so our reserves are steady. So far we have Achieved Goal, but it’s Too Soon To Tell if we will meet this goal for 2009.
  6. Retirement – We had hoped for a 30% increase in our balance. Between market increases, regular contributions, and matching contributions from my employer, we have already Achieved Goal. Still, it’s Too Soon To Tell if we will meet this goal for 2009.
  7. Level Out Monthly Expenses – So far,we’ve Achieved Goal and On Track for success throughout the year.
  8. Transition to a Single Income Household – Again, we’ve Achieved Goal and On Track for success throughout the year.
  9. Dont’ Freak Out About Baby Expenses – Some close calls, but we had saved well and found some good bargains along the way. I’d say we’ve Achieved Goal and On Track for success throughout the year.
  10. Maximize our rewards for normal spending – We are using a Citi Dividend Card for grocery and gas purchases (paying us back 2%) and have rewards attached to our debit card that gives us nominal points for regular spending. We might be able to do better, but I personally do not enjoy chasing rewards/rates for things like this or for savings accounts, since they change so much. Since we’re getting a level of rewards I’m comfortable with for nearly all of our spending, I’m going to say we’ve Achieved Goal and On Track for success throughout the year.
  11. Reduce student loan balances by 30-40%. Right now, we’ve paid 18% of the balance off. With a single income, we’re not able to pay as much, so while we have Achieved Goal in terms of being on track, I do not expect that we’ll probably come up short so we are Not On Track for this goal. Still, I’m happy with how much debt we’ve paid down and that we continue to do so even in small amounts when we have the opportunity.
  12. Refinance the mortgage – We had hoped to take advantage of the lower interest rates, but unfortunately the declining value of our home has made this all but impossible. We would either have to put another 20% of our home’s current value into a down payment or face PMI costs. Neither of these is something we want to pursue, so we have Not Achieved this goal and I can safely say we are Not On Track for the year.
  13. Begin saving for major home repairs – We want to start saving for long term expenses such as new roof, new windows, new driveway, etc. Due to putting a nice chunk of our income tax refund towards this, we have Achieved Goal and are On Track for the year.

Overall, I think we’re doing very well and I’m pleased with our progress for the year. The biggest bummer is that the home value declines have erased most, if not all, of our equity, making any financial goals around our home pretty difficult until that decline levels out.
Still, given how things have gone for a lot of people this year, I’m very pleased with how we are doing in terms of our financial goals.

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