Financial planning is about creating the life you want. It is about taking control of your monetary destiny. Dreams are wonderful, but to make dreams become reality, one must take action. Action is the only thing that leads to results. Once an individual decides to do that, the next step is constructing the necessary plan. Below are the steps to do that.
What do you want out of life?
Before commencing the journey to financial liberation, a person should ask themselves what they truly want out of life. Be honest with yourself, what do you really want? Are you content with the position you currently hold? Do you enjoy living paycheck to paycheck? If the answer to those questions is “no” you can decide what you want to do about it.
Create a Plan.
” People don’t plan to fail, they fail to plan.” Without a plan, an individual can not gauge there financial future. It is like a ship out in the sea without a sail. It will become lost, if it does not have a sense of direction. The plan will help a person navigate through the tough times. A plan could consist of 1 to 5 years. The first part contains where the person is now. The second part could state how they plan to get to where they want to be financially. The third part would state where they want to be. Once this plan is in place, the person will have a clearer direction. The steps should be clear and concise enough for a person to do them easily.
Implement a strategy
Implementation is the process of putting something into action or applying the plan itself. Once the plan is written out and a person knows what to do. They should begin executing the small steps. For example, if one of the steps is to save a certain amount of money, they should begin doing just that. Without implementing the strategies, the plan will not work and the person will not move any closer to their financial destiny.
Save Money
One of the steps in the plan is to save more money or begin. A great amount to save is 10% of ones income. For example, if a person brings home about $2000 a month, they should put at least $200 in a savings account every month. If this is done over the long term it will bring results. An individual will see that they have more to work with at the end of the year. It helps to put this money in high yield savings account. It will earn more interest this way.
Increase Income
An individual can augment their income by attaining an additional degree or asking for a raise. One could also get promoted to a higher position if they show initiative. The key is doing what is best for there financial future. If an individuals been working somewhere for several years and done a great a job, they should ask for an increase. ” Ask and you shall receive.”
Produce Multiple sources of income
“Two is better than one.” In the world we live, there are strength in numbers. Having more than one of anything is usually good. It brings great benefits. Having more than one source of income will help increase ones cash flow and also assist them in achieving there desired financial goal more efficiently.
Invest Capital
” Grow your money.” It is not enough to simple save money anymore, one must find the most compatible investment vehicle to invest capital in. Investing is very important. It provides financial stability and additional income for individuals. For the novice investor it helps to obtain a certificate of deposit or treasury bond. These asset instruments provide a person with limited volatility and security.
Anyone can dream, but taking them to the next level is about execution. If you really want to achieve it, do what it takes to make it happen.