This post on financial planning is authored by Robert, a FinanceWalk tribesman.
It is a very commonly heard problem that people can’t find ways to keep money. This throws their finances out of order and sometimes makes recovery impossible. Situations like these can only be handled by formulating proper and realistic financial goals. You may have a very busy life, but it’s equally important that you take time out of your hectic schedule to attend to your goals as well as establish them. The following are some steps that you need to make sure your financial goals are ready.
Steps of Financial Planning
1. Formulate a budget
Want an idea of your overall financial situation? Budgeting comes very handy here. With a budget, you get to know whether your expenses match your income. Higher-than-income expenses can hurt your finances very badly.·
2. Go for short term goals
It’s better to have short term financial goals if month-ends bring budget deficits for you. This will give you an opportunity to review your expenses and make the necessary decisions that will bring the expenses under control. Balancing your personal budget is all the more important.
3. Assess your needs and goals
What does your life want you to do? It’s important that you understand your needs and requirements well. Try to evaluate your present condition and what the future may bring you. For example, buying a house or saving up money to boost cash funds for emergency purposes.
4. Write down your financial goals
There has to be financial goals that you want to achieve. Go ahead and list all of them. Don’t forget to list budget balancing as a goal as that’s the most primary thing to do before you can make things work in your favor.
5. Categorize your goals
Now that you have your goals on paper. Make 2 separate lists and divide them under short-term and long-term goals. Your short-term goals will include constructing emergency funds etc. whereas buying a house will fall under the long-term goals.
6. Create appropriate deadlines for financial planning
You need to associate your goals with deadlines of your choice. Don’t think of it as an easy task. You’ll face enormous issues and things may go haywire if you’re unable to meet your deadlines. This is because your plans will fall apart. Therefore keeping head straight is of paramount importance while attaching deadlines to goals. Don’t let your deadlines make things suffocating for you. The purpose is to help you achieve your goals smoothly and not otherwise.
The aforesaid will help you set your financial goals without trouble provided you’re dedicated enough towards them. Make sure you’re monitoring your progress on a regular basis. This will tell you if or not you’re deviating from your plan, which could be really disastrous. This will also prompt you to make the necessary adjustments as and when the need arises.
Financial planning is a great way to bring oneself back together as well as reduce the chances of being prone to falling apart over and over again. Every good decision made will only strengthen your position as you look forward to a better and financially secure life.
Author Bio : Robert has been a contributory writer for many financial websites. His interests include writing columns and counseling people on subjects like finance,debt, investment and money making ideas for a better living .