Financial Adulting

CHAPTER 4All About Income

Once you have mapped out your money goals, it's time to put together your financial plan.

What Is a Financial Plan?

A financial plan is a realistic and optimistic plan of your financial situation and goals for the next 12 months (and beyond). It includes everything from spending to saving, paying off debt, giving, saving for retirement, and investing. It also includes a current snapshot of where your money is and what you owe.

If you're familiar with my work, you might know that I also call a financial plan, a happiness allocation. It's a plan to allocate our money in the ways that will make us the happiest in the short term and long term. How we talk about money matters. When we use terms that bring us joy or help align our actions with our motivation, it reframes how we think about and interact with our money. Depending on our privilege and lived experience, money may have some very negative connotations for us.

A financial plan is a living document. It can and will adjust over the course of the year.

Financial plans give our money a purpose. When we map out our finances (mainly our income, expenses, and what we want to go toward our goals), we can plan for the bigger things we want to accomplish.

In Chapter 3 I show you how to map out your goals. Your financial plan can make those goals a reality. When you look at your income and expenses in partnership with your goals, you can see exactly how to make them happen or what needs to adjust.

This ...