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Saturday, December 13, 2014

124. FLOP – a Financial Life On a Paper

Here’s the 4 step process to filling out a FLOP – a Financial Life On a Paper.




1. Fill out a Balance Sheet

A balance sheet captures the full picture of your financial health. Update it twice a year to see your progress.

It not only accounts for all the debt you have been paying off but all of your good financial decisions such as increasing your emergency fund, paying down debt, making wise investments which will affect your balance sheet in a positive way.

To get a clearer picture of your financial health you need to look at Assets (What you own), Liabilities (What you owe), and Net Worth (What you own minus what you owe).

It looks like this:

Assets – Liabilities = Net Worth

2. Choose a Pass Code

A passcode is a phrase that you can use with different variations. For example, what if you chose the following Pass Code:

Good2know!

This Pass Code has a capital letter “G”. It also has the number 2. And it has a symbol in the exclamation mark “!”. You can rotate the Pass Code by putting a combination of letters or numbers at the end of it.

For example:

Good2know!14

I chose 14 because the year is 2014.

Using a Pass Code allows you to remember passwords a lot easier too!

I would recommend changing your Pass Code every 30 days. I wouldn’t wait longer than 60 days if you forget.

Set a reminder on your phone or mark your calendar. Or even perhaps simply make it a habit to change your Pass Code on the 1st of the month.


3. Organize of all Login Information

After adding all your accounts and balances above in the first step with the Balance Sheet simply start filling in the account information, Login ID, Website, Phone, and Comments.

I’d put a pass code or password hint in the comments section.


4. Leave A financial Roadmap for my Spouse or Significant Other

In most families one person manages the finances – this person is often called “the Nerd” in the relationship. As opposed to the “Free Spirit” – the uninhibited one. But I digress….

What would happen to the spouse or significant other if “the Nerd” were to pass away?

Are you the money savvy person in the relationship? Does your spouse or significant other know about or can they access your bank accounts, investment accounts, safety deposit box, insurance policies, email accounts, social media accounts, etc.?

I would either burn the file onto a CD or copy the file onto a thumb drive. Then put it in a safe or safety deposit box. Update the FLOP every 6 months. If you want to track your progress with your debt fill it out every month or two.

Losing a loved one is a terribly difficult process. Having a plan in advance for your loved one will eliminate additional, unnecessary stress.

Note: If you can’t open the file download and install the free version of Microsoft Office: http://www.openoffice.org/download/

#FLOP #PassCode #FinancialLifeOnaPaper #Login #NetWorth, #Password

Are you ready to do your...




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