Financial plan is important in money management but do we really do it? Maybe we think too hard but the plan is easy.
The first step is ask yourself : What are the things you want to save and invest for ?
– Is it a home ?
– Is it a car ?
– Is it an education ?
– Is it a comfortable retirement?
– Is it for your children?
– Is it for medical or other emergencies ?
– Is it for periods of unemployment ?
– Is it for your parents?
You need to make list and then think about which goals are the most important. List your most important goals first.
Decide how many years you have to meet each specific goal, because when you save or invest you’ll need to find a savings or investment option that fits your time frame for meeting each goal.
Many tools exist to help you put your financial plan together.
Sit down and take an honest look at your entire financial situation. You can never take a journey without knowing where you’re starting from, and a journey to financial security is no different. You’ll need to figure out on paper your current situation -what you own and what you owe. You’ll be creating a ‘net worth statement’. On one side of the page, list what you own. These are your ‘assets’. And on the other side list what you owe other people, your ‘liabilities’ or debts.
Subtract your liabilities from your assets. If your assets are larger than your liabilities, you have a ‘positive’ net worth. If your liabilities are greater than your assets, you have a ‘negative’ net worth.
You’ll want to update your ‘net worth statement’ every year to keep track of how you are doing. Don’t be discouraged if you have a negative net worth. If you follow a plan to get into a positive position, you’re doing the right thing.
That’s some information on how to financial planning. Just do it now.