In times past, access to financial planners was something for those already well-to-do, with money that needed some direction. Thankfully, with the advent of the internet and the scaling that’s possible, professional financial planning is right at your fingertips for a fraction of the cost.

A financial planners’ job is to gather information from you about your current financial situation and your desired future situation. You take your goals and aspirations and you build a roadmap for how you’ll get there. eFinplan does just that with a straightforward web interface.

Knowing the best way to learn is by doing, I spoke with a co-founder of eFinplan, Kent Irwin, and he let me give the software a test run. Because the software is so straight-forward, I’m not going to talk about how to navigate it or anything like that. If you’ve filled out a form online before, then you can use the software. What I’d like to talk about, and the part that got me so excited, was the end product.

When I finished entering my financial information into eFinplan, I was given a 63-page comprehensive financial report. Emphasis on comprehensive. It’s broken down into easily-digestible sections so no need to feel overwhelmed. You can just work through it one bit at a time.

To be clear: the document is in no way an advertisement for anything. My first though was, “Oh, they’ll get this information and then be able to refer people to planners or insurance brokers.” I was dead wrong. The report is a plain vanilla report chock full of information.

Section 1: Present Financial Condition
The first section deals with how things are right now: a statement of net worth and a breakdown of capital assets (between taxable and tax-advantaged funds). An example of a tax-advantaged fund would be a traditional or Roth IRA, or a 401k, among others.

You then work through some basic assumptions (which are adjustable, but I recommend you leave them at the default) such as your life expectancy, expected rate of inflation, expected expenses at retirement and a slew of others. Just stick with the defaults and you’ll be fine

Section 2: Future Goals
Section Two is where things start getting fun. You work through your future goals (Maui+Golf, just for instance) to see if you’ll be able to fund those goals.

The great thing about eFinplan is that it’s not just a data output (from what you just input). It actually walks you through and explains the what, why and how of the whole plan. That’s where the value really is — in the education.

Continuing on with the goals section, it breaks down each of your retirement years and shows how your cash flow situation might be. If you worked things into your plan like funding college for kids (can you say expensive, hello?!), you’ll see a breakdown of how much you’ll need to contribute to meet goals for each of your kids, how much tuition is expected to be, etc.

As part of the college funding section, they give you a nice, consolidated report on the different funding opportunities available (529, UGMA/UTMA, etc.). It was nice to have all of that presented in one place instead of spending an hour on Google. It even educates you on various tax credits and deductions that make college funding easier.

As part of your future goals, you may have some milestone such as the purchase of a home (that was ours). That will be factored into your situation to make sure you don’t overestimate your retirement nest egg by not considering that hit.

At the end it gave a brief synopsis of my goals to:

• Retire at 40 (13 years away)
• College education for the (now three) kids
• Buy a Home

Section 3: Investments
Section Three is all about your investments. the eFinplan does a great job of teaching you about risk tolerance, diversification, risk vs. return, etc. It’s like having a financial planner teach it to you, but you can refer to this forever without having to pay again

You’re taught about the various asset classes (large cap, small cap, foreign, bond), selecting the right security (bond, stock, etc.) and timing the market (don’t!). You’re then instructed with great summary information about how different risk tolerance plays to different asset classes and their historical performances.

You’re then presented with what your asset allocation is verses what it should be. The eFinplan goes through rebalancing (there are funds that do this for you automatically).

Section 4: Risk Management
The eFinplan looks at your emergency reserves, property and casualty insurance, life insurance, etc.

The eFinplan gives great advice on cost saving tips for property and casualty insurance and when it comes to life insurance the information simply blew me away. It’s not that the information is secret or anything like that, it’s just that they present the different insurance options (term, universal life, variable universal life, and whole life — as an aside, I recommend term for 99% of people) with a brief descriptions and advantages/disadvantages of each one. Again, the information provided is stellar - it’s a great future reference.

The risk management section continues with disability, and long-term care insurance (again, with great comprehensive information).

Section 5: Your Spending
This is the section where YNAB comes into play as your method of aligning your spending with your values. The eFinplan analyzes your debt-to-income ratio and lets you know where you stand (I’m a fan of no debt), gives you solid advice regarding credit scores, taxes, trusts, health care, etc. The list goes on.

Section 6: Legacy Planning
This is the section where you’re reminded to get a will, a power of attorney, a living will, etc. Vital for anyone that would leave people behind over which you have financial responsibility.

Section 7: Implementation
The eFinplan report then walks you through which advisors you may need, and gives you great advice on how to select them. At the end of section 7 you have a consolidated report of action steps necessary for you to meet your goals.

The nice thing about how the report is organized is that each section has definable action steps that you should take, with a checklist to make sure you don’t miss anything. The eFinplan, for me at least, served as a great reminder of where I am, what I want to accomplish, and how I can get there. In comparison to the cost of a financial planner, it’s an absolute bargain.

I’d encourage you to check it out. I spoke with Kent just yesterday and he said they were doing a tax season promo, knocking the price down from $149 to $98, billed semi-annually, and they offer a 30-day moneyback guarantee. I’m not sure how this is not a no-brainer. Consider it an experiment. You won’t be disappointed with the end product (though you may get a kick in the pants telling you to start taking more action — but that’s a good thing!).

10% Discount for YNAB Users
Oh, and one more thing, Kent hooked us all up with a 10% off coupon, so instead of $98, it’s knocked down to $88. The coupon code is CDD98 and it’s good until March 10th. I thought it was a bargain originally at $149, so hacking 40% off is a steal.

Click here to check it out

If you’re budgeting’s going well, your logical next step is planning. It’s basically what you get to do with that cash flow you’re finding!

It’s not very often I simply post to the blog to send you somewhere else, but this post over at NCN (No Credit Needed) summarizes my feelings of late exactly.

It’s definitely worth a read.

“A man reaps what he sows” is a passage taken from the book of Galatians (chapter six, verse seven if you’re wondering). And while Paul may have been intending to address his readers’ spirituality, the Law of the Harvest can be applied across the board–spiritually, politically and financially.

Here we’re going to focus on the financial aspects of reaping what you sow.

Consider the process that a farmer goes through to bring his crops to harvest and finally see the results of his intense labors. The soil must be cultivated and prepared, the seed must be planted, the crop must be protected to the extent possible from the elements, it must be watered conistently, protected from weeds and other parasites, harvested and finally sold.

From idea to money in the farmer’s pocket, the process is a long one. When you combine the long process with the manual labor that’s required throughout, one could say that a farmer exhibits certain traits that enable him to successfully apply the law of the harvest:

1. Hard Work
2. Persistence
3. Optimism

In financial situations, the law of the harvest is alive and well. The only question is whether you choose to live it.

Hard Work

Naysayers of the YNAB software cite a learning curve (which I try and mitigate as much as possible) that is relatively steep. This, unfortunately, keeps many people from never really giving the software a full-fledged effort. A few days ago I decided I would see how difficult it was to get Quicken up and running. I bought a copy and went to work. And it was work! I still haven’t finished getting everthing up to where I’d be comfortable with it (and frankly, I’ll never get comfortable with it because it doesn’t have the Rules), but I made some headway.

Dismayed users of YNAB cite the difficulty in building their Buffer (one month’s expenses that you live on so that next month, you can live on last month’s paychecks), or the nuances of Rule Four (it’s subtle, but so important!).

Others just say the setup guide isn’t too helpful (I take full responsibility for that one).

As a result of this learning curve, with the attending dismay that it brings, I wrote The YNAB Way–my attempt to separate software from methodology with the hope that a thorough understanding of the methodology would make the software’s functionality intuitive.

The forums, another great resource, have helped me understand where new users are coming from and have also helped the veterans relate to the new users so that everyone can find a solution to their specific situation.

A new setup guide is in the works, and the tutorials have been a great success.

All this in a quest to make that steep learning curve more like a gentle slope. And I say all this to drive home a point that’s probably been lost a bit in this tangent:

Despite all the helpful tutorials, documentation, wiki, faq, and friendly people at the forums, adoption and full benefit of the YNAB methodology and accompanying software will require some hard work on your part. You will reap what you sow, however.

Several weeks ago I was asked why I don’t make the software more “mainstream” so I could broaden its market appeal and “make a lot more money.” As I thought more about the question I came to a clear realization. For me, YNAB has never been about selling software–it’s been about helping people see and manage their money in a new, more effective, efficient way. When asked what I do for a living? I help people learn to manage their money.

I guess the marketing approach is depth instead of breadth. Impact in people’s lives rather than impact on the bottom line. For some reason, I have this feeling that they’ll both converge at some point and I will be right on both counts.

When I first approached my wife about selling our budgeting system to the world, she said it wouldn’t work. I ignored her and went about doing it anyway and soon realized the potential roadblock that I was facing in my marketing pitch. I was going to have to tell people that they should save one month’s expenses (get their Buffer!). It seemed to be a fairly mean catch-22, staring back at me. People were coming to the site because they were probably operating with a very small amount of wiggle room in their finances, and here I was supposed to be coming in waving the banner of Financial Freedom with the simple instruction: Save your money.

‘Save your money’ to the guy that’s been operating in the red for several months is not too encouraging.

I plowed forward anyway, hoping people would see the benefits of Rule One–and I was right.

The success of the YNAB methodology is because it requires you to change. Can you use the software sans Rule One? Absolutely. Do I recommend it? Absolutely. But you better be straining and stretching to get your Buffer in place. You better be working at it.

So regardless of whatever great ideas the community comes up with to help new users with that learning curve (wiki and tutorials? both the community’s ideas), there is still going to be hard work in the newness of the whole idea, hard work with the implementation, and hard work with the ongoing tasks required of you (that’s right, you write down what you spend — every penny).

And all that hard work? I don’t think that’s such a bad thing. You reap what you sow (examples found here).

Persistence

While the world is full of cute sayings plastered onto inspirational posters of sunsets and sailboats (a journey begins with a single step, if you see a man atop a mountain–he didn’t fall there, etc.) the actual nitty-gritty of getting something done and making change is much less glamorous.

You don’t feel glamorous when you have a pile of receipts on your left, and some dorky budgeting software staring you in your face (on that face? an expression of perplexion). But those moments are when things get done.

If you’re a spouse “flying solo” because your significant other isn’t (yet, see optimism below) on board, you don’t feel so glamorous doing the above with them smirking or muttering–or both.

There certainly isn’t anything glamorous about putting a few things back at the grocery store once you see that your total is over budget. An embarrassing situation for most of us.

But you persist because persistence is key to change.

You may not feel especially successful when you first begin this process of change. Think about it. You’re possibly reversing years of bad habits. While I’d love to tell you of (and sell you, ha!) a fairy godmother, that would wave her magic wand and make you the savviest shopper, wisest budgeter, and sage-iest sage of investing…

Alas, that won’t happen. Ever.

You must persist in doing things that are good for you. You have to want the change more than you want those new tools, shoes, and gadgets. Persist!

To sharpen focus, I will give you three things which you must persist in doing until you are physically no longer able:

1. Write down everything you spend. Guage how freuqent this needs to be for you and then never ever ever stop doing it.
2. Plan, at least monthly (with each inflow if necessary), what your money should be doing.

Need software for that? Absolutely not. Any excuses worth mentioning? Absolutely not. Any reason why you can’t start today? Absolutely not.

I’ve persisted long enough with this, so I’ll end with my favorite quote about persistence, worthy of any picture of sailboats and sunsets:

That which we persist in doing becomes easier, not that the task itself has become easier, but that our ability to perform it has improved. - Ralph Waldo Emerson

Optimism

Our farmer is optimistic about the future. He believes that the weather will fare well enough, his work with the soil has been good enough, and that the seeds he has planted will grow.

You too can be optimistic about your financial future!

Be wary of damaging your optimism by comparing. Don’t compare yourself to anyone except your past self. Don’t worry if you have mountains of credit card debt when someone else doesn’t, that you make less than Joe or Jane, or that you couldn’t take your kids on the fancy vacation that your kid’s friend went on over the summer (and don’t try and puff yourself up by assuming it was all on credit card debt–just don’t worry about it at all). A sure-fire way to feel down about yourself is to compare to others. Realistically, the only person you really can compare yourself against is your own self. Financial situations are far too unique to be comparable to any degree of meaning.

When you work hard and persist, you have a right to be optimistic. You don’t have a right or guarantee of success. I heard it phrased once that we believe in equal rights, not equal results. So hang onto the right you do have. Based on the law of the harvest, you have a right to be optimistic. Be just that!

The law of the harvest stipulates that what you sow, you will reap. I believe that law is unequivocable. I’ve seen it in action. I’m certain you’ve seen it in action. Put in the necessary hard work. Learn the YNAB methodology and implement it. Persist in your efforts! Be optimistic that you will achieve those goals you have in mind. When you sow the seeds of sound money management, you will reap the requisite rewards. You’ll be debt free, your retirement contributions will be on autopilot, your emergencies will be small speed bumps, and you’ll be on your way to financial peace of mind.