Are You on Track Financially? Strategy Guide

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Are You on Track Financially? Strategy Guide

March 3, 2019 Financial Behavior Goals Retirement Strategy Guide 0
Image of tracks going in two different directions

Am I on track financially? The answer to this question is why many of my clients reach out to me initially. This is a very scary question to ask for many because most are not on track and acknowledging this reality means that you may need to shift either your goals or change your behavior to align your financial decisions with what is most important to you. The answer to are you on track is difficult to answer. However, it is still important to be aware of the following: why it is hard to know if you are on track, signs you may be on track, and what to do if you are not on track.

Why It Is Hard To Know If You Are On Track

Are you overwhelmed at trying to figure out if you are on track or not? You are not alone, there are many reasons why it is hard to know where you stand. Here are some of the most common reasons.

Unclear Goals

You have to first believe success is possible.

Having unclear goals is the number one reason that makes it hard to know if you are on track. If you do not know where you want to go or when you want to get there, then there is no way for me or anyone to tell you where you stand. Failing to set goals can be due to many reasons such as being too busy to discuss with your significant other or the fear of failure. I think the biggest reason though is that people do not believe accomplishing their goals is even possible in the first place. The belief that something is possible is one of the biggest drivers of success!

Many Moving Parts

Almost everything you do has a financial impact, which is pretty crazy but is one of the reasons I love financial planning. Your personal financial life is your own unique puzzle. Even if many of us share the same expense categories: groceries, housing, electricity, etc, the variation of choice between these spending categories is limitless. Then you sprinkle in your individual goals and experiences and your financial life is complicated.,

Non-Regular Expenses

Not every expense you have occurs monthly like clockwork. If you are new to tracking your financial life, you may be forgetting non-regular occurring expenses like vehicle maintenance, holidays, vehicle replacements, and gifts. Even these non-regular expenses can put your plan off course from where you expect to be.

Unknown Variables

Random occurrences like replacing home appliances, vehicle repairs, and medical expenses can also blow up your strategy. Remember when I said that you first have to believe that achieving your goals is possible? That would be a form of positive thinking. However, many people use these random unknown expenses to support their theory of why even try, something bad will just happen. This clearly is negative thinking. Luckily there are ways to prepare and better navigate these expenses and I share those ideas later in this strategy guide.


I consider inflation to be the silent killer of most plans. Inflation is the gradual increase in the costs of goods and services. Since most people have a hard time thinking long-term, they almost always forget to factor in the value of their investments and savings will not have the same purchasing power. Historically, inflation has averaged out to be around 3%. If that continues to hold up into the future, that means the cost of items will double in 24 years or so.

Signs You May Be on Track

Each of these signs alone may not mean anything, but being able to check off all of these boxes would definitely increase your financial confidence and ability to achieving your financial goals.

Clear Identified Goals

Your goals are so clear that you can already feel what it is going to be like to achieve them. You know why they are important to you and you have a specific timeline on when you want to accomplish each of them. You already have a strategy in place that uses conservative growth rates and projects you to achieve your goals.

Emergency Savings

Although savings accounts are not a significant source for building wealth, they give you a strong foundation to build from. They also allow you the ability to weather those unexpected expenses without interrupting your strategy for achieving your goals.

No Debt or Low-Interest Debt

No debt is great, but having low-interest debt is sometimes just as good (I should probably write a strategy guide to explain). Ultimately with either of these two debt alternatives, your cost to finance your lifestyle is either nothing or very low. This allows you to use more of your cash flow to build assets that will work for you.

High Savings Rate

I would consider a high savings rate to be in the 20% range. Though if you start early enough, 15% could be more than adequate if you do not have aggressive goals. A high savings rate means a few things.

Not only are you not spending a lot now, but your future retirement spending will also be low. As a result, your savings will go even further.

Proper Insurance Coverage

You can be way ahead of the game and then everything blows up if you do not protect yourself. Insurance is a pretty sweet tool because in most scenarios, health insurance being the outlier, insurance is a low-cost way to protect against catastrophic events. The three deficiencies I most commonly see are life insurance, disability insurance, and umbrella liability coverage.

(Related Strategy Guide: Life Insurance for Growing Families)

What To Do If You Are Not On Track

Not on track? That is okay, that means you are normal. However, it does not feel good to not have confidence in your financial situation and the best thing you can do is take action and control over your financial future.

Get Clear on Goals

Take time to think about what is most important to you. An exercise that I go through with all of my clients is to think about what if you only had 5-10 years to live? How will you make the most of this remaining time? What stands out as being important?

Now, what happens when we don’t have that life expectancy limitation? If you had no limitations at all what does your life look like?

You want to make your goals meaningful, measurable, and be time specific. Remember, it is your life and plan, you have the power to pivot down the road if life changes.

(Related Strategy Guide: What I Would Do With Five Years to Live)

Organize Your Financial Life

It is hard to have clarity when you are not organized.

Once you get organized, it makes it ridiculously easier to focus on an actionable list that will actually help you move the needle and increase your probability of success.

Eliminate Low-Value Expenses

If you are not on track financially, it is probably because you are spending money on things that have a low-value. Not to say that these things do not provide any value, but when you line it up side by side with a meaningful life goal, these items look really low.

If it has been a while since you have looked at your spending, you may be shocked by the expenses you are able to eliminate and still have the same quality of life. Many of my clients identify multiple hundreds of dollars in savings just by taking an hour on the weekend to see what the heck is going on.

Things to think about for your budget exercise:

  • Low Hanging FruitVisual of how to find ways to save
      • Subscriptions
      • Add practically no value to your life
      • Easy to substitute to lower cost
  • Stretch on Tiptoes Fruit
      • Might take an adjustment period to get used to
      • Research sales and bargains
      • Alternative instead of substitution
  • Tree Climbing Fruit
      • A significant change to lifestyle
      • Removing valued things and services
      • Change behaviors and habits
      • Downsize

Monitor Progress

It is called financial planNING for a reason. You don’t go through all of this hard work to create a framework and then never review your plan. Life is constantly changing. I guarantee your goals will shift, your income will vary, your spending habits will change, and you will probably get off track.

Regularly checking in with yourself will keep you accountable and hopefully, you will be able to celebrate your achievements along the way.


Understanding your goals.

It is not always obvious whether you are on track or not. You may be successful in some areas in your financial life and in others, you may be lacking. That is why it is important to obtain clarity on where you want to go and where you stand today. I hope this strategy guide serves as a resource to fill the gaps in your personal strategy guide so you can have greater confidence in tackling your exciting life that still lies ahead.

Check out Level Up’s Strategy Guide Process

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