Letter of Advice for the Brown Family

Dear Brown family,

1. Why it is important for us to develop and maintain a spending plan?

It is important to develop and maintain a spending plan so that you can keep track of your 

financial goals and make changes as you see fit along the way. With a spending plan you will increase your net worth, help manage your money, help reach your goals and help you see the opportunity costs of trade offs. By having a budget plan you are setting yourself up for a bright financial future. 

2. We don’t know how to develop a spending plan. Would you explain exactly how you developed our spending plan so we can repeat the process?

You need to first identify what your net worth is in the present moment using a spread sheet. Then find what you need to change; lots of times people change how much they spend on entertainment or clothes. Then change those items so that you can re-calculate your net worth to see if the new plan is better then your original plan. If it is then great, but still constantly leave time to evaluate and make changes to your current plan. Also don't forget to choose the best possible control system whether it be an envelope system or even a check register system having some sort of system will help you keep track of your money.

3. What changes did you make to our January Income and Expense Statement in order to develop our February spending plan? Please make sure to explain why you made each change.

I changed your January statement by increasing and decreasing certain assets. I decreased the amount you spent on restaurant food by 250 because you said you wanted to spend less money on restaurants. I also decreased the amount you spent on clothing because, although you need clothes for work, you were willing to spend less money on it. I also decreased the amount you spent on entertainment because I felt  that if you really want to make your net worth increase then you are going to have to save up your money. On the other hand I increased your emergency savings by 100 because you said you would like to save more on your emergency savings. I also increased your car loan payment to 50 dollars so that you could pay it off faster. Lastly I increased the amount you spent on groceries by $50 because you are spending less money on restaurants.

4. Our goals needed to be more specific after creating our spending plan. What do you think our new, more specific goals should be?

I think your new goals should be the following:

You plan to save enough for your car loan payment by saving an additional $50 each month for 12 months. You will need to spend 50 dollars less on entertainment.

You plan to save  for your emergency savings by saving an additional $100 each month every year.

5. What control system do you recommend we utilize and why?

I would recommend you use a Internet based spending plan program because that way you can both access all the information you need together instead of one person having all the paper work.

6. We want to evaluate our spending plan from month to month and ensure it continues to work for us. Do you have any advice for us regarding how to best do this? (offer at least one piece of advice)

I would suggest to plan your time for evaluating your spending plan to make sure you will stay on top of your budget. Usually take time around their pay day to evaluate their plan but do what ever works for you!

I hope everything works out!

Your financial adviser, 

Katryn

Financial Independence is the Key!

How Much Money Do You Need To Be Financially Independent?

This article (link to article ) gave me a different perspective on what it means to be wealthy. To be wealthy you must have a good net worth, like we have been studying. This rule of thumb created by Danko and Stanley can be helpful when finding your net worth:"Multiply your age times your realized pretax annual household income from all sources except inheritances. Divide by 10. This, less any inherited wealth, is what your net worth should be.".A lot of millionaires don't have fancy cars and expensive houses as some may just assume. These millionaires actually save their money and are very frugal. My mother told me how she learned how to be frugal through her family members, so it is always best to be surrounded by people who know how to save and have good financial habits. You can have a huge income and still be struggling to keep up with your finances if your wages worth is spent on expensive items. By looking at your financial statement this problem can be fixed if you take out the items in your statement that you do not need. I would say that this article was a perfect way to tie everything together. This article definitely gave me a good sense on what it actually means to be wealthy; I learned that people who look rich may not actually be rich. I don't aspire to be a millionaire I aspire to be financially independent. This article opened my eyes to the power of saving and keeping track of your savings.Lastly, I realized that being financially independent ultimately will bring happiness to one's life.

Learn about Dietitians and Nutritionists...

I have created a  website if you would like to learn about dietitians and nutritionists! :) 

https://sites.google.com/a/prsd.org/katrynd-dietitians-and-nutritionists/

My Research About Dietitians and Nutritionists

Before I even researched Dietitians and Nutritionists I had to figure out what kinds of jobs I was interested in. I used the "My Next Move" site to give myself a better understanding of what jobs I should be looking into. This site narrowed down the amount of jobs that would best suit me. I like how this site first applied my interests and talents into the equation because that is probably the most important part when trying to find a career. You want to be able to enjoy your job. If you don't enjoy your job then you are negatively affecting your well being by hurting your long term happiness. So, the "My Next Move" site really puts your well being before anything else. This site also asked what kind of training I want to go into. It is crucial to know what kind of training you are up for when finding a job because you want to make sure you are well aware of the steps you need to take to get the job. The last part to the "My Next Move" site was to look at the jobs that were recommended and then find jobs that seemed interesting. A brief description was given for each job which made the process a lot easier because all I had to do was click on the job to understand what it was about instead of having to look through the web to find every single job. I ended up choosing 'Hospitalists/medical director', 'Dietitians and Nutritionists' and 'Mental Health Counselors'. 

After choosing these three jobs I furthered my research by using the bls.gov site. This site really helped me learn so much more about each job. I learned about the wages for each job, the skills needed for each job, the availability of each job, and so much more! I ended up choosing 'Dietitians and Nutritionists' because it fit all my interests and expectations. More specifically being a Dietitian or nutritionist means helping others have a better life and that is something that I would find joy in doing.  The bls site really helped finalize my decision by answering any questions or concerns I had about each job. Ultimately, this was a positive experience because I ended up having a clear understanding of what kind of jobs would be the right fit for me. Also, if I ever change and want to take a different career path then I can always go back and use the MyNext Move and bls.gov sites. 

Is The Way You Live Today Affected By Money?

I interviewed my mother asking her questions about how money affects her life. I learned that money can make ones life not as stressful. One's basic needs are taken care of when they are in a good financial position. Like my mom said "Growing up I never felt like I was lacking in any way. I always felt we had more than we needed. I didn't have to stress about that part of my life, but I was aware some people did have to stress about it". My mother told me about how she learned from her grandmother, her father, and mother that reusing objects helps save a lot of money. They were "pretty frugal", for example; they would save paper and bags. That surprised me how they all learned the same method to save money. One thing my mom suggested I learn was to not spend too much with a credit card or through the internet because it is very easy to spend a lot of money quickly that way. I agree with that because I have shopped online before. It is just so easy to find the things you want within a couple minuets and click the "add to cart" button. Once you are online it is also so easy to get caught up in products you weren't originally going to purchase. Before you know it you are spending way over the amount you wanted to spend. In my future I hope to learn how to manage a credit card, otherwise I will be in a lot of unwanted-could-have-avoided debt. My perceptions of my mom did not change through this interview. However, my mom did give me quite a few tips that I will need in my future. One of those tips she gave to me was that money can be a positive thing but "it is not as valuable as the memories with the family". So ultimately money can't buy you happiness once your basic needs are taken care of.

Values, Needs, and Wants- Oh my!

To be Financially independent you have to have your values, needs and wants straight. If you can identify a want from a need then you will be able to save money and spend your money on things you must get instead of want to get. However, wants and values also differ. Things that you value have purpose for your life. You usually have a deeper reason to get things you value then to get things you want. For example, if your happiness depends on getting a higher end products because you value the quality, then either save up for that product or eliminate other items that you want to get so that the price of the higher end product is manageable and not going to make you in debt. On the other hand, a want is like buying a bunch of stickers because you spotted them in the store and you thought they looked really cute. Make sure your needs come before your values and wants because your needs are there for a purpose, you can't do without them.  If you can live without your wants and values you should do that instead of getting your values and wants and not being able to live comfortably.

Doing the well being work  Changed my thoughts on how your value, needs and thoughts come into play. Having well being means that you feel good about your life and feel good about how you are living financially. This showed me that your values do matter and by being financially smart I can include both my values and needs most of the time. I originally thought that your values are almost equivalent to your needs, but they are far from it. Everyone's needs and values are different, so everyone's financial plan must be different as well.