Personal Financial Planning Tips
Have you ever been stressed about being able to manage your finances? Do you want to be able to save efficiently and still be able to spend on items you need? Well, having a financial plan will be a great start! Financial planning is a process to help you make good decisions when it comes to your expenses, spending, saving, and borrowing. Whether your goal is to pay your student debt or to save up to buy a home by the age of 35, having a good financial plan will help you achieve your financial goals. The earlier you start with your planning, the faster you will reach your goals!
Making Financial Goals
When making financial goals, make sure you follow the following:
Set specific financial goals - Create goals that are clear, measurable, and attainable. Don’t set goals that are too big for you to achieve. This won’t help you in any way and if anything it will only make you unmotivated because you won’t be seeing as many results.
Write your goals down - Seeing the list of goals and keeping it in front of you will serve as a reminder to keep you motivated throughout your journey.
Make an action plan - Create a plan that will help you succeed at your goals. Think of questions such as how long will it take you to accomplish those goals? What steps do you need to take to reach them?
Reflect on your goals - Revisit your goals often and adjust them when needed.
Financial Planning to Achieve your Goals
Take care of your expenses
It has become very easy for us to purchase on credit and buy with the money we might not currently have. Although this may seem convenient for the time being, we need to make sure that we stay caught up with any payments due, to avoid any extra charges on the debt we owe. So, make sure that your bills are always paid on time and in full. This will help you avoid interest charges on unpaid bills.
Track your spending
Even if you have a steady income, spending too excessively can put you in debt or leave you unable to pay the month’s bill. Be aware of your spending habits and control them. Set a limit for yourself on how much you need to spend. Keep in mind that this amount will vary depending on each person. However, the goal here is the same. Keep track of how much you spend on necessities, and decrease your spending on wants as much as possible.
Be smart when taking loans
If you’re ever in need to take a loan, make sure it’s for a good reason. Taking a loan to pay your rent is a financially sound reason. Don’t borrow money to get VIP Backstage tickets to a concert!
Creating an emergency fund will be very helpful in a time of need! The money you put into this fund should only be used in an emergency, such as losing your job, to pay for necessary expenses.
Resist the temptation of spending all your money after paying your bills. Make a habit of putting aside an amount you’re comfortable with. No matter how small the amount might seem it will all add up. Just make sure you stick to doing this and do it often!
To recap, in order to achieve your financial goals, you need to have a financial plan in place. Ensure that your financial plan includes your bills being paid on time, always keeping track of your spending, saving often, and keeping an emergency fund.
Written by May Masrieh