Today I am going to discuss personal financial planning. First of all, I like to tell you an introduction of personal financial planning. Personal financial planning is planning for yourself and for your family to protect them against life’s sudden surprises. There is no hope in life, so we have to be careful about spending life and spending money. Personal finance is all about saving money and managing money. It includes income, savings, and investment details. Limit debt is a very important point to plan your personal finance. Many people don’t know where to get started? They lack knowledge. They don’t know how much does a financial plan cost? Also They don’t even know how to plan? And that is why they think they need professional support.
In past people hire a professional to create a financial planning for them. But now-a-days social media is on top and we are very advanced so that now we don’t need any professional to create planning for us and our family. On social media many websites and pages help us to manage our savings. Beside this you can plan your personal finance step-by-step. You have to use your brain and start thinking about your expensive. Eventually, personal financial planning can reduce your worries and help you to grow day-by-day. By personal financial planning you can learn where to spend your money, and when to save. It helps us to reach our goals. Financial plans help us to prepare for unexpected surprises like sudden illness, jobless etc.
S.M.A.R.T plan can help us to plan our finance.
T: time based
We all have some goals in our life that we really want to achieve. But due to financial problems we’ll fail to achieve our goals. If you really want to achieve your goals then you have to use personal financial planning. For example you want to get marry but due to money problems you can’t marry and then you get disappointed. And if you want to start a business but you are not financially stable then a financial plan helps you to meet your current financial needs and to achieve future goals. Today you will learn everything about financial planning. You have to start working on it as soon as possible but the good news is that you will start working whenever you want to start because it’s never too late or too early to start working on financial planning.
There are many steps to plan your personal finance; we are going to discuss some steps given bellow:
1: Set financial goals:
To start working on financial planning you must have to clear your goals. You must have to think why you are saving money? Where do you want to invest your hard-earned money? Think about it and set your financial goals that you really want to achieve. Some people think it’s a hard job to set financial goal but it’s not so difficult to understand you goals and then start working. It is the most important step in financial planning. You must have to set financial goals. Once you set the goals and understand why you are saving money, you will be able to start working on your personal financial planning. It will help you to achieve your goals as well help to meet your family expenses.
2: Create a budget:
This is also very important step in finance plan. You must have to decide where to send your money? And how to send your monthly savings? To create your own budget you must have monthly cash flow and savings plan. This will help you to save your money. If we have good savings or investing plans we’ll definitely succeed.
3: Review your current situation:
Now it’s very important to check out your financial situation. Before you start this process you must need to checkout your current financial condition. You need to calculate your payments for gas, electricity, Netflix etc. Also You have to figure out what else to add? You must need to know about your personal and crucial expenses by highlighting your regular expense and then irregular expenses by different colors. You should check your previous bank statement. When you have done all this then you know what should you do and where could you cut down on spending? You must have to reduce your expenses.
4: Create a plan for your debts:
As we all know that No one likes debts. But this is the major issue. You must need to get rid of this issue as soon as possible because if you don’t do this then you will face many problems that you can’t ignore if you want to financially save and secure. You have to start working towards being debt-free. Create planning for your debts and then you will start work on finance plan. If you can’t handle several debts then you can take a cheaper loan from bank. This will help you to start working on finance plan as soon as possible. You must create a plan firstly to get rid of your most problematic debts. In short , you must need to take steps and start creating plan for your debts.
5: Emergency fund:
This step is very useful for anyone. If you think you are ready for any emergency situation then you are wrong. This world is full of difficulties and unexpected surprises like sudden illness, losing your job, met an accident or irregular expenses. You must be ready to face all these situations. It found very beneficial as emergency fund is like a financial safety cover that will prove very useful in any emergency situation.