Chapter 13: Planning Ahead

If you have ever gone looking for how to plan your finances for the year and given up somewhere around February, it probably was not a failure of effort. Traditional budgeting keeps you looking backward, sorting through what already happened and accounting for where things went wrong. After an hour of that, who has the energy to think about the next few months? Chapter 13 is what becomes possible once the system is running. It works because you already budget by paycheck, so the year is built out of units you can actually see. Planning ahead is what protects the progress you have already made, because the most common way momentum disappears is an unexpected expense going on a credit card or coming out of savings. Plan for 75% of what is going to happen and the other 25% gets a lot easier to handle. The planning ritual in this chapter is Past, Present and Future. Past is a two-minute glance at whether the last pay period went the way you planned. Present is what you need for the current one. Future is where the real work happens and where most of your time goes. You look at your calendar, you scan your SpendFuture categories, and then you go after the ones that never make it onto a list: the deck that needs staining this summer, the mattress you keep saying you will replace. The things that turn up at 2 a.m., never at a convenient time. Noah and Chantelle came to Kelsa after years of what they described as doing everything right but never getting anywhere. They would pay extra on the credit card one month, feel proud, then watch a forgotten annual bill wipe it out the next. Once they started planning three months ahead, they could see their daughter's dance recital fees, their car registration and a family trip all in the same quarter, already funded. Then they took a family vacation without putting a single dollar on a credit card. She cried in the airport. What you will walk away with is a rhythm for making decisions while things are calm, so the version of you who has to handle it later doesn’t have to scramble. Resources mentioned: See the illustration from this chapter. The Year-at-a-Glance Planner comes with this chapter. Pull it up when it's time to plan and let it jog your memory instead of trying to hold the whole year in your head. Subscribe so you don't miss next Thursday.