25 Apr Using Your Line of Credit to Eliminate Student Loans – Part 4
Expect and Plan for Change!
We naturally expect that our current situation will remain the same. This creates feelings of fear, euphoria or apathy. In the absence of planning, each of these emotions can be dangerous. Each of these emotions can blind us from taking advantage of current opportunities. Fear can keep us taking advantage of opportunities available to us, euphoria can cause us to make unwise choices that hinder our future and apathy paralyzes us from making choices. Looking into the future can motivate us to act.
Projecting Your Future Earnings
Have you ever considered how much money you’ll manage until you retire? For example, if you’re a twenty-five year old recent college graduate earning $40,000, over the next 42 years you will earn 3.28 million dollars. I’ve assumed your salary will increase 3 percent annually. Where do you want your dollars to go? Create your own projections. Play with Calcxml’s calculator and see how much money you’ll earn over your career.
Create Your Vision
With every years increase, how much will you plan on saving? Suddenly, there’s a series of decisions that you will make. Even if you don’t consciously make a choice, your spending habits will reflect your decisions. What if you were to make a conscious choice? Can you save 25, 35 or 50 percent of each raise? What impact will these choices have on getting rid of debt and boosting your savings.
CashMap’s Utilize Your Positive Cash Flow
See the impact of integrating your future cash flow growth with keeping your dollars working 24/7. Projecting your positive cash flow is the second step of creating your personalized plan. I’ve created three personalized CashMaps: a CashMap keeping 25% of your annual raise, a CashMap keeping 35% of your annual raise and, a CashMap keeping 50 percent of your raise.
If you’ve written down your dreams and you know how much you’ll need to save, you have a motivator to see how you’ll spend your money to meet and maybe even exceed achieving your goals. If you’ve never written down what’s most important to you about money and what you’d like to achieve or the next five, ten and fifteen years, now’s a great time to start. Review my articles ‘Budgeting Yuk!’ and ‘Know Your Dreams Before Using a Line of Credit – Part 2’. Use my free template, ‘These Are My Dreams’ to help discover how much your dream will cost and how much you’ll need to save each month.
In my next post we’ll see the impact that our assumptions have on how quickly you can pay off your student loan and boost your savings.
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