Financial planning is probably a thing that each one of use should incorporate in our lives. In the absence of such planning, your life would be nothing but a complete financial mess with no funds to finance your marriage, no savings for your retirement, and no money to educate your children.
You can initiate the personal financial planning process at any age, it’s never late to start it. There are, however, certainly many benefits of starting early in life. You have more years to reach your financial goals and enjoy its benefits.
Get a Journal
To begin with the personal financial planning process, get a personal journal in which you would note down everything from your financial goal to your execution to how well did you achieve it. To many, it would seem to be an idiotic thing to do. However, when you have a written goal, it’s more specific than a vague idea. It has more value and it seems realistic. You must do it if you don’t believe me.
Alright, so now you have finance journal. On the very first page write down ‘Financial Goals’ and on the next page list down all the things you wish to have on each line. It can be anything like ‘buying a new car’, ‘accumulating a million’, building a retirement fund’, etc. Do not, however, miss out anything. Just keep jotting it down without thinking about ho would you achieve it.
After you have listed down all your goals, prioritize the list on the next page. You would have to think a bit when you do this because your next step would be depended on this list. Hence, list down what you want to achieve first, then second, and so on.
Next, put a price tag to all of them. What I mean is write down the amount you would need to achieve each of them. This would probably be a very easy task. However, setting a timeline for each of them is quite an intricate process. Jot down the date by which you would want your each financial goal to be achieved, like buying a new car – $10,000 – before 20th May 2011.
Now, focus on the first goal, forget about the others for a while. Determine how much you need to have to achieve your financial goal and by when. A bit on calculation would determine how much you would need to save every month in order to achieve that goal. It would be really simple for you to achieve it. If you do it this way for all your goals. You would be less stressed and would be able to enjoy your life instead of worrying incessantly.