Posted on: 14 April 2017
Most people know they need a financial plan, but not too many people have any idea where to start with such a thing. It's because of the inability to start, those same people wait far longer than they should to take financial planning seriously. Here's how you can start your journey towards a real financial plan.
How Do You Start a Financial Plan?
A financial plan isn't just one thing. It encompasses all the ways you can turn your current financial state into the financial state you would like to have at any given point in the future. It's a series of personal goals to obtain that future state.
Getting started means you need to evaluate your current financial state. From there, you create realistic goals to help you reach the future financial state you desire. When it's broken down to just those two things, it can become easier for someone to start working on their financial plan.
What is Your Current Financial State?
Knowing your financial state will help you to take a finer control over it. To put it another way, it's important to know exactly where you stand, before you attempt to take a step forward. To that end, take stock of all your finances.
- How much debt you have
- How much you have in checking and savings accounts
- How much income you bring in, and how often
- How much money you spend, and on what
- Your current credit score
- Your securities and retirement accounts
- Your overall net worth
It's important you have a solid foundation to start with. Ideally, you will want to know where every penny of your money sits. From there, you can start moving on your financial goals.
What Are Your Financial Goals?
A plan requires a goal. You must define your financial goals so you can have something to work towards. Even if you don't yet have solid goals, you can still start budgeting yourself and putting aside funds while you work on defining them.
Your financial goals can include several things. Before, you figured out where you stood. Now you should figure out where you want to end up. Your goals can start nebulous and you can refine them as you go along. Where do you want to be?
- Free of debt?
- Financially secure?
- Able to make a large purchase?
- Comfortably retired?
- Able to handle a medical emergency?
All of these things can represent financial goals. You don't have to work with just a single goal. Maybe you want to do all of those things and more. It's possible, but you have to work towards them.
How Do You Turn It All Into a Plan?
A plan for your financial goals can look as simple as saving a tiny percentage of your income each week for a time. Or, your plan can become complex as you juggle several goals at once. It's not something you have to figure out on your own.
You can speak with any of a number of investment services out there to help you with your financial planning. The task can seem daunting, but with some help, you can start to take the steps towards achieving your financial goals.Share