As you start another year you are looking back at what you did last year and planning on how to move forward for 2023. I’m sure some of you have your planning complete and are off to a positive start. For others, this may have been a difficult year to plan for. 2022 started out like gangbusters and then came to a screeching halt, so how do you plan for 2023?
I start my planning for the upcoming year by using a worksheet that I developed called the Enough Worksheet. It is divided into two sections; the first section establishes my ENOUGH. In this instance, my definition of Enough is the amount of income I need to cover the basics for my family, like housing, food, transportation, health care, schooling, clothing, insurance, etc. Then I add in the basics to run my business, like marketing, business expenses, brokerage fees, etc. By combining these two “basics”, I establish my ENOUGH for the year. This should be your absolute basic needs to run your life, and your business, while maintaining your current lifestyle. In other words, your absolute bottom line of what you must earn to pay all of your current bills.
Once you establish your ENOUGH, then you can move on to establishing your MORE THAN ENOUGH. This is where planning gets fun! This is where you can establish your goals to obtain the life you want to live, your ideal life…. with a touch of reality. Yep, it would be nice to have that house on the ocean, but is it realistic to think you can purchase that this year? Probably not, but when establishing your MORE THAN ENOUGH, you can work toward that goal. To help me do this, I like to open individual accounts at my financial institution for each of my major goals. For instance, I have an account at Schwab that is labeled Beach House Account, it’s pretty obvious what that account is for, my dream beach house. I have several of these accounts, a new bass boat, major home improvements, etc., along with my retirement accounts. I also have charitable contributions and the not fun accounts like emergency and car repair. I have about 10 separate accounts just for my MORE THAN ENOUGH. This may sound complicated and even dumb to some of you, but this system helps me plan for life and dreams. To fund these accounts, I have money withdrawn from my checking account on the same day every month and transferred to each of the Schwab accounts. It’s done automatically, every single month.
When completed, this worksheet gives me two numbers to work with. The ENOUGH is the minimum that I must make and the MORE THAN ENOUGH is my goal for the year. Of course, this changes every year based on what the market is doing and what I think I will do in production. One year, especially when the market is down, you may feel that if you can just make ENOUGH then you will be satisfied. In other years you may be confident enough, and have a plan, to really succeed at accomplishing some goals In any case, this is a great way to establish reality and a system to reach your goals. But remember, you must start with knowing what your ENOUGH is, without that, you will never know when you have MORE THAN ENOUGH!