5 Ways to Create a Personal Financial Plan
The money you earned, is it quickly made, or is it hard-earned? Whether it is rapidly achieved or hardly at all, you need a financial plan to serve as a road map for your money. It would be best if you had a tool to back your progress up; that tool is personal financial planning. Do you always find it challenging to make financial decisions? Then, it would help if you had a personal financial plan. Do you ever find it difficult to answer an emergency when the need arises? It would be best if you had a personal finance plan. Does paying your kid’s expenses always seem complicated? The solution to your problem is a personal financial plan. I am sure you are all eager to know what this Personal financial planning is all about and how to create a personal financial plan. Relax, we will get there.
Hello readers, you are welcome once again to another beautiful edition of my regular blog. As always, I am committed to helping you gain financial freedom, as evident in all my blogs. But, before then, have you subscribed to my newsletter? If no, what are you waiting for? Subscribe to my newsletter to always be in the loop. See other related blogs like“4 Easy and Useful Tips on Becoming a Millionaire?” Also there is good news for our patient readers. There is a bonus tip on creating a personal finance plan for them at the end of this all. So, keep reading. Shall we begin?
Before taking a step forward to learning how to create a personal financial plan, let’s look at the benefits of creating a personal financial plan. With the help of knowing the benefits, it will ease making a personal financial plan.
With a personal financial plan, making decisions will be much easier to do, especially when you have a family. Family security will be guaranteed; a personal financial plan offers family security. Whether the economy is failing or not, no one loves to see their family suffer or wallow in need. With the help of proper personal financial planning, your family’s needs will always be taking care of and at the right time.
A personal financial plan will help you keep records of your present earnings, spending, and what you will have available for the future. It also keeps you off a debt that is so unmanageable. Instead of going from one debt to another, with the help of personal financial planning, you will start keeping off from debt because you no longer spend more than your income.
Lack of a personal finance plan usually leads to living a life of bondage, and I am sure no one loves to live a life that is not free. Personal financial planning will help you keep a record of your spending, your little expenditures, and your daily or monthly income.
Everyone loves the idea of an increase in cash flow. Personal financial planning assists you in increasing your cash flow because there are more savings. Both short and long term needs will be well attended to without going beyond your income limit and without incurring debts.
Personal financial planning will open your eyes to knowing the difference between asset and liability. An asset is anything that brings you more wealth, while liability keeps taking money away from you. With the help of personal financial planning, you will know how best to manage liabilities.
Personal financial planning can be of different types, either planning for retirement, insurance, budgeting, banking estate planning.
Let’s look at creating a personal financial plan:
- A well detailed financial goal needs to be set, bearing in mind that a goal has to be put down on paper or a book. A goal cannot be on your mind only without you writing it down. The same goes for the financial plan. You will need to put an explicit goal down. Having a clear idea of why you saving, how much you want to save will go a long way to help.
- Having a budget is another way of creating a personal financial plan. You will need to have an account of your monthly or daily cash flow, savings, and investment plan. Know how much you want to spend in a month and know how much you would love to put into your savings. Have a mindset of not spending more than you earn. It leads to nothing but debt. Yes! You spending money that you are yet to receive as salary will lead to bondage definitely.
- Build an emergency fund. Never allow an emergency to push you from one point to another, begging people for money. Why not do the right thing by saving up for the rainy days to avoid fall.
- Learn to keep track of your money. Every penny coming in should be well noted, and every penny going out should be taken responsibility for. How long do you plan on running out of cash to take care of your family? How long do you want to keep spending and spending without a proper plan for the future? Take a great decision now to save for the stormy days ahead.
- Do you have a plan for your retirement? Or have you forgotten that the job you are doing at present isn’t yours to keep? It’s not going to continue forever, more reason you need a personal financial plan. Either give your plan to the expertise to help you out, or you sit down and try creating one for yourself. The earlier it is done, the better you start enjoying an increased standard of living.
Here comes the bonus tip:
- Have you ever wondered why rich people keep investing? It is merely because investment brings them more and more wealth. It is not just enough to save. Invest your money and keep getting more of what you invested. With an increase in wealth comes a more comfortable life for you and your family. Don’t you think your family deserves all the enjoyment they can get in life?
From time to time, review your financial plan and look at it, mostly if something significant happens like getting married, giving birth to a baby, change in job, unexpected debt, or any form of inheritance.
Let’s enjoy this eye-opening story and make a choice today, to start creating a personal financial plan.
There was this neighbour of mine. He never once had an issue with his kid’s school fees. He pays his bills on time. He is always at peace with his wife; he doesn’t spend unnecessarily. I admired his lifestyle. The curiosity in me pushed me to ask him, sir, how comes you are living such a comfortable life. He said to me “The secret to a comfortable life is in having a personal financial plan,” I was amazed, he further told me about his investments and how it brings him more wealth. He told me never to spend money I am yet to acquire. I was excited, I took immediate action, and I am also enjoying a comfortable life.
On the other hand, a family friend of mine, who bluntly refused to heed my advice on him having a proper personal financial plan, always fight with his wife, either because he does not have money to fill the gas or because he has no money to pay for house bills and he is a salary earner. A few days ago, I was at his place. I saw his kids coming in and it was during the school hour. I asked them why they are not in school. Guess their response? “Daddy is yet to pay our fees” this is not good enough. Can you bear to see your children become illiterate? Do you want your family to go to bed without a proper meal? I am quite sure the answer is no. Why not start your journey to financial freedom now. Allow your money to work for you, instead of you becoming a slave to money.
Just think of this beautiful picture, coming back from work where you are being welcomed by the faces of a smiling husband or wife and kids. That can only happen when they are comfortable. A hungry wife and kid can’t have a smiling face. People with personal financial plans are the best. They are living their best life.
It is straightforward to do, learn to manage your debts, avoid liabilities, embrace investment, plan for your tax payment. Build an emergency fund, claim, and protect your insurance. You can also stay off the financial crisis, get your comprehensive evaluation of your present individual pay, all you want to spend, and how much you plan to save. Be intentional about your current financial situation. If your financial plan is failing, that means there is a problem, reevaluate and revive it, do some necessary corrections. Have an alternative course of action. How about thinking of the enjoyment you will get with so much money already saved up before retirement. There won’t be a need to move from one doorstep to the other for people to have pity on you and give you money because you already have your plans.
Take action this moment and create your financial plan. Allow your money to keep increasing without much stress. Be a financial pro, be intentional about how you spend money, think of tomorrow in everything you do.
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Recommended for further reading:
- The Richest Man In Babylon
- Keys to Success – Napoleon Hill
- Think and Grow Rich! – Napoleon Hill
- Unshakeable: Your Guide to Financial Freedom
- Rich Dad’s Increase Your Financial IQ: Get Smarter with Your Money