When it comes to your financial future, am sure you are always left with too many questions than some answers. The only solution to all your questions regarding your financial future is planning, planning your finances.
It is always fun to figure out where to go, how to reach there and what all to do there. Your trip might not go as planned but you will have alternatives. Financial planning is more like planning a trip/ travel. It is a roadmap of your financial goals, how to reach them and alternatives that you have for your finances. There may be new twists and turns, but if you have a plan, it is always easier to adjust and get to where you want to go.
Your financial plan should connect all the interrelated parts of your life. It should include questions like
- What would be the cost for my child’s college education?
- How much to spend and how much to save?
- Do I have the right insurance for my needs?
First step: Identify your financial goals – your dreams for your family, kind of lifestyle you want, your retirement.
Second step: Evaluate your assets, liabilities and net worth.
Third step: Understand your cash flow; income and expenses.
Fourth step: Simplify your financial plan because complexity can take your focus away from what you want to achieve.
Fifth step: List of things to be done to make your plan a reality.