• Maybe it’s the fault of our government who continues to propagate the idea that they will take care of us, that we are entitled to a certain standard of living and who continues to spend more than they make by a wider margin every year.
• Or perhaps we can blame the media companies who put all the latest gadgets, toys and shiny playthings in front of us continually with the message that if we don’t have these things we are missing out and somehow less successful than our peers.
• Or we can blame the entertainment industry; who tell us that everyone should be living a dream and push us to buy all the trappings of that dream life.
• Maybe it’s our neighbors fault because they keep buying new things for their houses, new cars and electronics and if they have a landscaping service don’t we need one too…

In all honesty we have no one to blame but ourselves if we are living beyond our means. We have control of our financial destiny and no one else is going to care if we are broke when we should be retired and enjoying our golden years. Take responsibility for your finances and block out all the noise from outside. Look inside yourself and take stock of what you really need to make you happy. Chances are it’s not a new iPod or a new BMW or new furniture. It certainly isn’t mountains of debt that only make the banks and credit card companies richer. Chances are many of the things that will make you truly happy require very little money.

It may seem painful initially and many of us shy away from taking a close look at our finances for fear of what we’ll find, but you need to start out by creating a budget to find out how you SHOULD be spending your money. Once that’s done track your spending for a month or two to see if that is really how you ARE spending your money. Chances are there are a lot of little things you buy that aren’t in your budget. These could add up to hundreds of dollars a month (I know in my case they did). By simply becoming aware of where your money goes you might be able to get to the point that you’re spending less than you make.

One thing I can guarantee is that if you’re living on less than you make you’ll have less stress in your life. Small emergency expenses won’t create a huge problem for you because you’ll have the money to cope with them. You won’t be dwelling on where you’re going to get the money to pay this bill or that bill each month. You’ll know that you’re building a solid foundation for your future and I can tell you it will give you both a feeling of relief and satisfaction.

Another thing you’ll find once you’re living on less than you make is increased freedom. When you’re trapped in the debt spiral or living paycheck to paycheck you often have few choices in where your money gets spent or how much of your time you need to trade for the money that you need. Once you’ve gotten to the point that you spend less than you make all sorts of choices become available. The choice to quit your second job or turn down overtime and spend more time with your family is priceless. The choice to get away for the weekend with your spouse or take your family on a week long vacation WITHOUT increasing your debt is wonderful. The choice to follow your dreams, whatever they may be, often only opens up once you have the freedom from living paycheck to paycheck.

If you’re still spending more than you make then I highly recommend you take a look at your finances and make a plan TODAY to get that under control and spend less than you make. It may be a struggle initially, you may feel overwhelmed or like you’ll never be able to make it work, but if you don’t make it work now you’ll end up in a much worse place. Plus I can guarantee that once you get your spending in line with your income you’ll feel more relaxed and more happy overall.

I don’t know about the rest of you, but I tend to be pretty egotistical and have the idea that I can figure out pretty much anything on my own. I’ve felt the same way about my personal finances and still do, but have decided that getting the opinion of an unbiased outside observer might not be such a bad thing. Dylan Ross helped me along with his guest post at GetRichSlowly, When And How To Hire A Financial Planner. So, I’ve contacted several local CFP’s and have even set up an initial consultation with one. I’ll let you know how that turns out in a follow up post.

I’m still sure I can figure all this out on my own and hopefully make the best decisions regarding my financial future, after all who cares more about my well being than me (well maybe Mrs. Infant). Truthfully though I can only devote a small amount of time to studying finances and investment. So, while I know I would eventually get the knowledge I need I view meeting with a financial planner as akin to going to Kindergarten for the Money Infant.

Because the CFP spends his/her time continually learning this I think I can definitely learn something worthwhile. The planner I will be meeting with has over 20 years experience and I know has counseled many others on their financial well being, certainly that should provide them with a wealth of knowledge to draw upon? I am only looking for the basics at this point; retirement planning, how to reduce my tax bill and planning for my (almost) newborn daughter’s future education.

It will be nice to get a second opinion on my finances, but I know that all does not depend on my financial worth. I was reminded of this recently by a post about where the readers of The Simple Dollar want to be in 5 years time. Of the seven excerpts posted none of them focused on wealth or financial goals, although many of them did tie in with money in a subtle way.

The way I see it, many goals and dreams can be helped along when you no longer need to worry about money. It frees up so much energy and gives you the peace of mind and freedom to pursue just about anything. Here’s a great quote from Trent that pretty much sums up why we not only need to dream, but also need to chase that dream;

”…it makes you happy regardless of what other people think and whether it makes you any money or not – that’s something you need to dig into.”

My dream is to one day retire to Thailand. Obviously I would like to accomplish this sooner rather than later and have been focusing much of my energy towards this dream of mine. The possibility of working with a financial planner is just one more thing that will allow me to put more energy into my dream. If they are good they should be able to point out places I am making mistakes with my money as well as guiding me to position myself better for the eventual move. If I know more already than I believe than I will just find that I can trust in my own financial decisions more. Either way I should come out a winner.

What do all of you think? Is it necessary to work with a personal financial planner or can you do it all yourself?

Up to this point my own personal finance goals have primarily been to pay down my credit card debt as quickly as possible.  That being the case, I didn’t do much in the way of planning outside of creating a budget and doing some quick monthly analysis to make sure I was freeing up as much cash as possible to accomplish that goal.  Definitely a down and dirty approach to financial planning, but it’s worked thus far.  It has taken me the past 2 ½ years and I’m not totally free yet ($6900 to go!), but I have been able to pay off over $30,000 from the credit cards.

Now that I’m almost done with the credit cards it’s time to get the rest of my financial house in order.  At 43 years old I have very little saved for retirement and that needs to be a priority.  In addition, my taxes this year are astronomical and I need to formulate a tax strategy to avoid a repeat next year and in years to come.  Third, I will become a father in late May/early June and want to start saving for college expenses for our new little girl right away.  And finally, we plan on making a move to Thailand within the next 2-3 years and need to put money aside for a variety of things in connection with that move.

Detailed Personal Financial Goals for 2010 and Action Plans

1. Pay off the remaining credit card balance.  While this is a priority it is no longer my only priority.  Over the past 30 months I have been using every dollar available to pay down credit card debt.  With a bit of breathing room now available and some changing priorities I won’t be doing that any longer.  My current balance on my one remaining card is $6906.17.  The plan is to continue to pay $350 per pay period (I get paid bi-weekly) throughout the end of the year.  Come December 31^st I will pay off any remaining balance with emergency savings.  Chance of meeting goal – Very High
2. Increase retirement savings.  There are several things I can do to address this and have already begun to do so.  I would like to max out my 401k by the end of the year and have already increased my withholding to get closer to that goal.  The nice thing is this also addresses my tax strategy as it will lower my AGI (Adjusted Gross Income).  At the current rate I will be putting roughly $11,000 in my 401k in 2010.  The second part of this strategy involves opening Roth IRA’s for both myself and Golf and funding them fully ($5000 for 2010).  Chance of meeting goal – Moderate  I believe I can meet the Roth IRA contribution, but am not sure I will hit the full $16,500 contribution limit for my 401k.
3. Start saving for our daughters college expenses.  Honestly I am still a bit clueless on this one, mostly because I can have no idea where she will be attending college.  As I mentioned we are planning on moving to Thailand which means our daughter will grow up in Thailand and will be attending English speaking International schools there for her primary and secondary education.  So that begs the question of whether or not she will want to come to the U.S. for college or if she will choose to stay in Thailand for college.  Obviously if she comes to the U.S. we could use a 529 plan, but I am unsure what would become of the money contributed to a 529 if she chooses to attend college in Thailand.  I am also trying to determine a good way to start putting money aside for International school in Thailand as they can be quite expensive.  I still have 3 months until she is born which should give me time to do the necessary research and you can rest assured I will be revisiting this topic in the near future.  Chance of meeting goal – Undetermined, more research required.
4. Increase emergency savings.  We currently have a nice 3 month cushion that will be mostly wiped out by our 2009 tax bill and 1^st quarter 2010 estimated taxes.  So, we will need to replenish the emergency fund.  We are looking to get roughly $5000 in there since we would also be able to draw upon the Roth contributions if necessary in a true emergency.  Our current budget allows us to put aside $1000 a month easily into this fund so it should be back up to strength by August.  Chance of meeting goal – Very High
5. Saving for the move to Thailand – This is another area that requires a bit more research as costs in Thailand can be very low to just as expensive as the U.S., especially in Bangkok which is where we plan on settling.  The good news is that some of our other savings vehicles can also be considered savings for the move to be drawn upon as necessary.  The emergency savings can certainly be used for this expense as can the Roth contributions.  At this point this is the lowest priority on my list of things to accomplish and I can’t say I have a set goal for 2010 as far as how much needs to be saved.  If I meet both the emergency savings and Roth contribution goals I will feel I am on a good path.  Since we do not plan on moving for a few years this goal definitely has some wiggle room.  The timing is also dependent on meeting my final goal – increasing self employment income.  Chance of meeting goal – Moderate
6. Increase self employment income.  This one will come down to how much work I put out over the next 9 months.  Currently my monthly income runs somewhere in the neighborhood of $1200-1300 and I would like to double that by the end of 2010.  I have started new projects and am re-investing 25% (currently) of my gross income back into my ventures in an effort to push the income higher more quickly.  My projections show that I will need a minimum of $3500 a month (at current currency exchange rates) prior to our move to Thailand if I don’t want to have to get a job teaching English once we’re there.  Obviously the higher this number is the better off we will be and the easier the move will be on our finances.  Chance of meeting goal – Assured.  I am committed and this one is non-negotiable.  Boy did I just put myself out on a limb or what?

So those are the current goals in a nutshell.  I will be assessing my progress on a monthly basis and updating you all on where I stand and where I’ve fallen.  As an infant it’s quite common to fall down pretty often when you’re learning to walk!  I’m considering meeting with a certified financial planner as well, just to get a second opinion and ensure that I am on the right course.