How to make a personal financial plan - drawing up a financial plan
A business document that reflects personal financial goals, represents the current state of your financial affairs, contains a realistic plan to achieve your goals is called a personal financial plan. It is made, as a rule, for five to ten years, but there are also short-term plans for one to three years. Any plan should be carefully thought out and transferred to paper. Thus, he acquires specific tasks, and does not remain a set of desires in the head. And here, of course, it becomes interesting how to make a personal financial plan? Such a document should be step-by-step painted with actions that need to be taken to achieve financial goals. Consider everything: income, expenses, liabilities, assets, financial goals, strategies, insurance. This is a realistic plan to achieve goals through the accumulation and investment of personal funds.
Current financial situation
First of all, it is necessary to analyze the current financial situation. You need to establish how much you earn and how much you spend, that is, set your budget. Planning for income and expenditure is not perceived as greed or meticulous frugality. Treat this as a need to understand how and what you spend money on. By the way, on the Internet there are many different programs( paid and free) for drawing up a personal budget. Note that if people do not understand the strength of the financial report, then they have the least money and, accordingly, more financial problems. Remember that you will never be able to plan serious financial projects unless you evaluate the movement of your money.
As a result of the analysis of the financial situation, you will find reserves and begin to invest a certain portion of your income in the intended goals. Therefore, thinking about how to make a personal financial plan, start everything from an analysis of your financial situation. Practice shows that many people have no idea what their costs are.
Setting goals
Answer the question: what tasks do you want to solve in the period of five to ten years? This is the first condition of any plan - to determine what you want, that is, to determine the goals. They should be formulated specifically and clearly. This is your concrete dream in terms of material. For example: a house, a car, a dacha, a child's education and so on. Think in detail about what your dream( goal) should look like. For example, you say that you want a new car. This is not a goal setting. If you say that you want a particular car, let's say Mercedes is in excellent condition, then this is also not considered a goal setting. The goal you should formulate approximately so: to buy a Mercedes-Benz car;term of acquisition - 5 years;the purchase price is about 30 thousand dollars.
Therefore, dreaming, setting goals, do not forget about some rules.
First, the goal should be determined in time( indicate the desired time frame for achieving the goal).
Secondly, it should be really achievable.
Third, it is impossible to achieve several goals simultaneously.
Fourth, decide how much you can invest. Practice shows that the investment is allocated a real amount - 10% of the total income. Do not run after the unreal. Avoid unjustified risks.
Think about the protection of
Any financial project( if you are planning to invest money) is a certain risk. And you must understand this. Do not adjust yourself to failure beforehand. But hedging will not be superfluous. It is reasonable to secure a certain untouchable amount( usually cash), which will help out in case of unforeseen circumstances. Financial advisers say that everyone can save painlessly up to 10% of income and up to 25%, slightly limiting spending. It is also worth thinking about health and property insurance.
Define strategies and tools
There are three strategies: moderate, conservative and aggressive. You choose. The universal formula, of course, does not exist. Consider, if you do not want to take risks, give preference to a conservative strategy. These are bonds, bank deposits, foreign investments. Moderate strategy - these are investment funds. But for people who love risk, an aggressive strategy will do. This is investing in stocks, hedge funds.
If you are not sure how to make a personal financial plan, you can ask for help from specialists working in the field of personal finance. A competent financial adviser will save time and offer a variety of financial instruments, help you choose the optimal tactics for achieving the goals, and give strategic recommendations. Remember, such a plan will help to change your financial situation( reducing unnecessary costs, increasing revenues, revising your life goals).Good luck and prosperity!