Sports admin  

Writing a financial plan on your own

Like everything in life, you need a plan to succeed. That goes for your personal finances too. No one is completely financially secure unless they have accumulated millions of dollars and decide to live off the savings for the rest of their lives.

Unfortunately, most people are not ready for retirement. Financial planning is crucial to reaching your goals of retiring comfortably. But having said that, how do you go about writing a financial plan without any formal education?

Below is a quick step-by-step guide to writing your own financial plan. Of course, a professional financial planner can provide you with a more comprehensive financial plan, but this will go a long way toward understanding your needs and removing some obstacles.

1. What are your goals?

Don’t be afraid to dream, you only live once. Think about the size of the house, education, your family, etc. Just write down these thoughts about how you want the future to be. Once you list your ideals, remember to keep in mind global issues like children’s education, insurance, etc.

Your goals should include:

* Education. Regardless of your age, additional education and training is needed, whether for a career change or self-improvement. Many people take college courses (even with teenagers) or upgrade to an MBA to move up the corporate ladder. Even if a college education is out of reach, you still need to plan for your child’s college degree, unless you intend to leave them to fend for themselves.

* Career. In which field do you want to work? Is it a creative job or a typical 9-5? Or do you want to be your own boss? Do you want to create multiple sources of passive income?

* Lifestyle. Is work or family more important? Are you pleased with a “simpler life”? Do you want a Porsche or BMW? Do you want to live in a mansion, a house facing the sea, etc? Do you have expensive hobbies in the golf life? All of these cost money, so you need to tabulate your expenses and compare them to your income to achieve your lifestyle goals.

* Withdrawal. Don’t forget about retirement. It is a time when you lose your income. So how do you want to live while you’re retired? Will you downgrade your home, live with your kids, or move to a retirement community?

* Sure. Nothing is certain in life. You need to be insured for worst case scenarios. Every financial plan should have provisions for insurance.

These goals may seem daunting, but they don’t have to be wishful thinking. The actual money set aside could be much less than you think, if it comes down to effective financial planning.

2. Plan your income

Of course, your financial plan isn’t just about your dreams. How are you going to pay for it? I guess you don’t have a sugar daddy, so you should be pursuing a lifetime of employment. Most people have their career path marked out in this format: go to college, get a job, work hard to get promoted, and retire.

There is nothing wrong with the breed, except that there is great uncertainty in today’s globalized environment. People change jobs all the time due to layoffs or to look for new challenges.

Instead of a day job, you might consider starting a business or becoming a freelancer to sell your skills. Business isn’t just for those with money, MBAs, or connections. You can start a lawn care home business, make money online with a website, or a vending machine business.

In addition to becoming your own boss, you can find other income through network marketing or investing.

Investing is efficient for generating secondary income, as it simply increases the money you already have. You can buy gold, stocks, bonds, real estate, etc.

Regardless of whether you are a business owner or an employee, you should not let your money sit idle under your mattress. Even putting your money in an online savings account is more profitable.

3. Writing your financial plan

At its core, a financial plan is a lifetime budget. You’ll be budgeting not just for your next paycheck, but for your entire life. Planning involves knowing how you will get there and when you will get there. There are no hard and fast rules.

You have to be rational enough to assess your current situation, creative enough to see what is possible, and have the integrity to follow through with the plan. Remember, just because it’s on paper doesn’t mean it will happen – you have to decide to go ahead and meet your goals.

Start by doing the following:

* Timeline. Establish where you want to be in five years? Ten? Thirty? Fifty?

* Research costs needed. Your current “bills” plus 5% annual inflation. Don’t forget to factor in life insurance, health insurance, auto insurance, etc.

* Research luxury costs. What do you want to do. Cruise ships, nice cars, nice houses, etc.

* Income strategy plan. For most people, they start with wages. But don’t forget that your job is not your only source of income. Starting a side business, a hobby to earn money, or even making money online are all viable options for additional income.

* Investment plan. Investing is simply a necessity to counter inflation. You can invest in anything. Just make sure you know what you’re doing and don’t put all your eggs in one basket. As you get older, financial security should become increasingly important.

Try to take into account all possible costs and income. Whenever you’re not sure of the numbers, be conservative. Also, keep in mind that a financial plan is ALWAYS about your goals. It’s not just about money, it’s about getting what you want out of life. Money is just the tool.

Leave A Comment