Just as every Monday is the world day to start a new diet, all of December everyone is making plans and setting goals for the next period.
You start thinking about your health, your studies, work, relationships, trips, and also think about your pocket: how can I do everything I want if I do not have money? That’s exactly why you need personal financial planning. Surely you have already heard that money is not the problem but the solution .
The goal of creating a personal financial plan is that you can get where you want. Nothing happens that you dream of your house, a new car, your quiet retirement. But the big problem of only dreaming is just that: nothing happens.
The best way to realize your dreams is to have a concrete plan and hands-on. With these 6 simple steps you will have the right strategy to achieve your goals. What are you waiting for?
6 simple steps for good personal financial planning
1. Set goals
Here you will put all your dreams and wishes . You can add wishes for your whole life, 10, 20, 50 years; but, if you prefer, you can start with your smaller aspirations only for next year, for example. The methodology of planning does not change, do not worry.
Now you need to take out dreams that are unattainable, such as being more powerful than Donald Trump, or participating in the colonization of Mars. Those who remained are going to become goals. These goals must be specific, achievable and must be linked with time . Example: I want to buy a new computer, saving € 130 per month in 10 months.
2. Make a budget
You must make a record of all your income and expenses. If you are not used to that, at the beginning it will be a little hard, but I guarantee that after a couple of months it will be automatic and you just have to win.
With your budget you will have more control of your expenses, you will identify the things that you spend the most, you will know your level of savings and you will know your ability to pay. Having this data, you can go back to your goals and adapt them.
In the budget you must detail what your income and expenses are. For expenses you can make a separation between fixed and variable. The fixed ones are those that you can not stop paying, like the rent, the supermarket, transport, etc. The variables are, mainly, all those related to hobbies and fun. They are very good things but you can live without them.
With the budget done, you will quickly know where you can cut expenses, how much money you have left, how much you can save and you can make the budget for the next month.
3. Take control of debts
Now that you have everything very detailed, it is time to attack the debts . It is not going to be easy to follow your dream path if you are carrying a weight of debt.
How much and who do you owe? Put all the meeting debts with your budget and set up an action plan to pay them.
If you are ready and without debts, you have to move on to the next step.
Now that you have your goals and budget, you need to define what amount you should save monthly to meet your financial goals . Take into account that saving is not what you have left, vice versa, it is an “account” as important as your fixed expenses.
There are some options that you can see in your bank that, automatically, on the date you choose, they already take out the sum indicated by you and put you in an investment account or another fund that you want. The savings will be like a “fixed expense” . After you add all the fixed expenses, there if you go to see what you have left and you can spend at leisure.
You believe that the value of your savings is not enough to reach your goals in the time you want, you can save more by increasing your income or reducing expenses. If you still do not arrive, you can change the time: instead of saving € 130 for 10 months for your new computer, save € 100 for 13 months, for example.
Now we come in the best part of putting the money to work for you. Besides saving, you need to invest.
Contrary to what many people think, it is not necessary to have a lot of money to start investing. There is an infinite number of possibilities to invest with little money. There is no general rule that you must follow, you must understand well what is your reality and start from there. Now you will have to study and investigate, research and study.
6. Commit yourself
Super! You came here and now? Are you going to do it all again in 6 months? Surely not. This is an exercise that you will have to do always. Like any development of a new habit, it is more painful at the beginning but later it becomes natural and easier.
Look on the positive side: is not it going to be wonderful when in a year you get to make that long-awaited trip? In three years you can buy that much-aspired car? And, in five years, the much-desired home?
Keep your dreams close to your thoughts and you will not go out of your way. Surely with good financial planning and commitment you will get where you want without any doubt. Is there any other step that you think is not in our planning? Do you have a different methodology? Do you have a good practice? Let us know and share your knowledge with us.
The unexpected happened?
Unfortunately, we know that not only is it enough to make a personal financial plan that everything is ready or resolved. Sometimes the unexpected happens and it takes us completely out of our way. For these moments, has Bunter.
With Bunter you can request personal loans online up to € 800 with a response in 15 minutes. No queues, no payroll, no endorsement, no paperwork.