Personal Financial Plan is Important to Avoid Unnecessary Money Hurdles
It is always important to understand what a personal financial plan is, why it is important to have a one and when you should develop a it. Most people sit down to deliberately consider the implications of various courses of action and select the one they will follow only when faced with changed circumstances such as a new job, a big promotion, a new baby, a death in the family, imminent retirement, child ready for college and so on and so forth. Even when they do so, their decisions are usually limited to the specific issue that has prompted them to act. This is because most people do not have a comprehensive financial plan, do not know why they need one and often begin planning too late.
A personal financial plan is a systematic process of managing one’s financial resources so as to achieve personal satisfaction. Personal Financial Plan is advantageous in several ways all the more reason why it is wise to secure yourself with one.
You take control of your financial circumstances and save you the stress of becoming a reactive victim.
Stress and uncertainty in life is reduced
You are assured of avoided excess debt burden.
also reduces the economic dependency on others.
Over depending on others is no longer in your vocabulary
Enables you to achieve your realistic financial goals in a timely fashion
You and your spouse are always in good books and will make financial decisions that are well planned and effectively communicated.
You achieve your financial goals in a timely fashion.
Eliminates the sense of financial helplessness that leads people to depend on luck or get-rich-quick deals for success.
The above points make a lot of sense and anyone who respects his finances would want to lead to that direction. Let’s now look at picture of how such a financial plan would look like.
Personal Financial Plan Cutline or if your want it financial map:
Know your current financial Position
This is best clarified by calculating their net worth, which happens to be the difference between one’s assets and liabilities. Make sure you track your net worth by calculating it at least once a year to know your financial progress
Decide what you want to achieve in the near, medium and distant future
Like whether you want to buy a house or take your child to high school, whatever, but the goals must be specific, measurable and realistic.
A written Personal Budget is a key to strategic income management.
It is true that one cannot manage what they cannot measure. Without a budget, you cannot measure how much you are spending on.
Investment Plan.
Money simply sitting in a bank is as well as dead because it is wasting away due to inflation being higher than the interest paid by the bank. You must therefore decide how to invest your savings.
Personal risk Management
Plan on ways to approach a risk if it happens. Punicing at such moments will not solve the problem. If it were planned then ti is easy to deal with it.
Put your plan into implementation
Regular review of your plan is very important your plan to succeed, it must be a continuous process. Once you have your written financial plan, put it into action, and then review it at least once a year, making revisions as your circumstances, priorities and resources change.
One important aspect of financial planning is that it helps you begin preparation for the big challenges early giving you the opportunity to take advantage of the power of compound growth. Anyone who operates with a written financial plan is not caught off guard when their child is ready for college, such a person buys a home at their chosen time and one that is within their budget and retirement becomes a time to celebrate the golden years. Take advantage of this important information and start planning for your finances by coming up with a financial plan.
Poly Muthumbi is a Web Administrator and Has Been Researching and Reporting on Debt for Years. For More Information on PERSONAL FINANCIAL PLAN, Visit Her Site at PERSONAL FINANCIAL PLAN
Watch the video related to financial plan
Write down your goals, don’t get emotional, and stay on course.
Help answer the question about financial plan
How do I make a financial plan for a daycare?How do I make a financial plan for a bussiness loan?
June 9th, 2009 at 3:31 pm
I set up his budget form (modified to our specific bills) on Excel. Now that was about 4 years ago.
Now he has software (about $25) available on his website or subscribe to My Total MOney Makeover section of his website and you can do the budget there (link below). Or Crown Financial (originally started by the late Larry Burkett who Dave gives a lot of credit to) has budgeting forms and online software. (Link below) Crown also has software (last link)
Both would be the best way to stay completely in line with Dave's principles. Both of the on-line subscriptions have free trial periods.
June 9th, 2009 at 3:43 pm
So many things to do, hard to boil it down without more info but…
1. Determine your goal. Can't plan to get there if you don't know where you are going.
2. See where you are so you know what you are dealing with. Look at your bills, spending patterns, debts, assets, etc.
3. Work on your high interest debt. Get rid of credit card bills or any other debt with high interest. If it is going to take some time, try to negotiate lower rates or consolidate into a lower rate.
4. Set up a regular savings plan so you have some emergency funds.
5. Once your credit card / high interest debt is out of the way work on 'bigger debt' like student loans, car loans, etc. If renting do the math and see if an affordable house can save you some money. Make sure to keep up your regular savings plan until you have a few months backup
6. Work on getting house, car, big loans paid off and keep that savings plan going
Also want to make sure to: Check out life insurance for dependents, check out / make a retirement plan, make sure I'm making good daily decisions on my spending.
Just my 2 cents worth.
June 9th, 2009 at 4:45 pm
Hamilton's idea was for rich people to loan the government money through bonds. In order for those bonds to retain any value (and the people holding them to be able to cash them in later), the government would have to survive. Therefore, those rich people would use their influence to make sure the government succeeded. Common people living hand-to-mouth didn't have extra money to loan out, or influence that would affect the fate of the new government, so they were pretty much left out of this process.
June 10th, 2009 at 2:05 pm
BusinessPlans.org contains a large library of business plans
http://www.businessplans.org/index.asp
June 10th, 2009 at 5:06 pm
Your personal financial plan must be based on your personal financial goals. First, determine what goals you want, then write a plan. You could visit your local bank and ask the financial planner at your branch to help you set a financial plan.
June 11th, 2009 at 1:43 am
Blue chip stocks
June 11th, 2009 at 10:26 am
Most people need a goal to work toward in order to succeed. Even though it may vary significantly, it gives you a figure to strive for, and hopefully exceed. Then when you do exceed it, it's a great feeling that you wouldn't have if you hadn't set the original goal.
June 12th, 2009 at 12:25 pm
There are 2 ways that CFPs might be compensated. On a fee basis, or on a commission basis. If the CFP is not trying to sell you specific investments, $3,500 to $4,500 is probably very reasonable for a fee-only comprehensive plan (Goals, investments, insurance, retirement, and estate planning).
If however you are going to be encouraged to buy particular mutual funds or insurance products, then the planner is probably being compensated by commission. In that case, charging $3,500+ is probably double dipping. The complexity of your financial situation factors into whether the fee on the whole is reasonable. Think in terms of the CFP having professional fees equivalent to those of a CPA or attorney. If professional fees in your part of the country average $200 hourly and the bill ultimately is $4,000, then that translates to about 20 hours of professional services work on the part of the planner.
June 12th, 2009 at 3:53 pm
On Medicare you can expect to pay $95 a month for part B, and if you want an insurance supplement expect between $100 and $150 a month with no deductibles or co pays. If HMO around $78 a month with co-pays and deductibles. If you are not 65 plan on about $500 a month for private coverage until you are 65.