Marathon Money: Long-Term Financial Planning Strategies
Most people handle money like a sprint. They spend what they have with almost no money/energy left over from one month to the next. Did you know that over 60% of Americans live paycheck to paycheck? This includes many people in the middle and upper classes. That’s well over half the population whose lives would collapse if they suddenly lost their job or ability to work. However, smart money management is not a sprint: it’s a marathon.
In marathon running, you need to conserve your energy, planning for the long-haul instead of burning everything you’ve got right away. The same is true when it comes to building a plan for your budget, savings, debt repayment, and even investments. By planning your budget like a marathon, you can set yourself up for long-term success.
Here's what you need to know.
Pace Yourself with a Comprehensive Budget
Running a marathon, the key is not to over-spend your energy before the finish line. You pace yourself, going at a steady rate while keeping that final goal in mind. Building a budget can do the same for your finances.
Compare your take-home pay to your expenses and figure out how to stretch your resources to the “finish line” at the end of each month.
- Make a list of necessary bills
- Assess your must-have expenses like groceries and gas
- Distribute your money so that it stretches comfortably between paychecks.
It’s also important to reach each paycheck with a little energy left over – so that you can keep running. In our marathon analogy, each paycheck is a refuel station – these are stocked with water, sports drinks, and sandwiches to give runners more energy to keep going. Each paycheck is a power-up, but you don’t want to reach payday completely spent.
Each paycheck should refuel your budget, but you should be able to coast comfortably into each payday without ever being at risk of running out.
“No one succeeds without effort… Those who succeed owe their success to perserverance.”
– Ramana Maharshi
Starting small can lead to big results.
Building Your Reserves with Every Paycheck
A savings account is part of long-term planning. Call it an emergency fund, a rainy day fund, or a nest egg – it serves the same purpose. Your savings can keep you going even if your expenses suddenly spike or your income suddenly drops.
The best way to build up your reserves is to put a little into savings from every paycheck. In our marathon analogy, this is the equivalent to jogging slowly, saving up extra energy in case you need to make up time later on without exhausting your resources.
Saving even a small amount at a time can slowly build into a surprisigly deep savings account. Set aside as much as you can afford, up to 20% of your income, but it can be much less. Put away the same amount with every paycheck before you spend on anything else.
After that, if you save by choosing to spend less during the month, be sure to drop the savings into your account.
Consistency will lead to steady progress.
Maintain a Long-Term Account Strategy
Only open financial accounts that are built to last. Choose a bank for your checking and savings account and stick with them. Choose one to three credit cards with good rewards (like cash-back, grocery, gas, or restaurant rewards) and clear away the rest. Keep these accounts going for years to improve the stability and length of your credit score.
Milestones can make the finish line seem more attainable.
Set Milestones for Debt Repayment
Debt repayment can be an important part of the journey. Debt doesn’t have to be a drain on your resources if you make a plan. Pay your debts a little every month, starting with the highest interest and smalllest debts.
Set milestones for your debt repayment so you can celebrate as you go along. Consider fully paying off each small debt as a milestone. Renegotiating a large debt might be another. Then you can start burning down larger but more stable debts until, after a long run, you are eventually debt-free.
Seek Support from a Debt Resolution Service
Debt resolution services can be extremely helpful in reaching your debt repayment goals. A debt resolution service can help you renegotiate debts, trade small high-interest debts for a loan with a friendlier payment option and get rid of debts on your record that should have already expired.
You can find helpful solutions to manage your debts with DebtBlue where our experts will help you build the long-term financial strategy you need to succeed.
You have options, and we're here to help!
Run Your Budget Like a Marathon and Discover Long-Term Financial Success
As you embark on the marathon of financial planning, remember that success requires perseverance, discipline, and strategic planning. By pacing yourself with a comprehensive budget, setting milestones for debt repayment, and seeking support from services like DebtBlue, you can overcome the obstacles along the way and secure a brighter financial future. So, are you ready to lace up your financial shoes and start your journey towards financial independence?
Contact us today to begin your race to financial independence. With us as your teammate, you are destined to win!