Personal Financial Planning: How to Take Control of Your Finances
Feel a little lost when it comes to money? Do you make more money than you need, but somehow wind up scrambling to pay the bills?
These things are common for a lot of people. Young people, in particular, tend to have a little trouble managing the checkbook.
Money management is a skill, though. You’ve got to learn it before you start seeing any results.
Personal financial planning is a big part of the money management equation. It involves setting yourself up for a bright financial future and making sure that you’re able to grow and take care of your bills every month.
We’re going to give some essential tips for financial planning today, giving you a little insight into ways that you can refine your personal budget. Let’s get started.
Personal Financial Planning Essentials
The first thing to do is to take a good look at your last bank statement. Look at your income, look at your expenses, and see where your money is going.
Last month should be a good indication of your general financial situation. We operate without thinking a lot of the time, especially when it comes to spending money. You’re marketed to constantly from the moment you wake up and open your phone to drive home when billboards make suggestions to you in passing.
Companies spend billions of dollars a year on those ads for a reason. They work. As a result, we’re a little quicker to cave into impulses and desires by spending a few bucks.
It adds up, though. We forget about those decisions, but they’re documented on the bank statement. So, take stock of those things and categorize your spending to see where you’re at.
Set a Few Measurable Goals
The next step is to identify the direction you’re headed in. Set financial goals for the next month, the next year, and the next five years.
You don’t have to plan your entire future, but it helps to have a plan for the foreseeable one. When you make the plan, though, ensure that it’s measurable.
Things like “I want to be less stressed about money in the next five years” aren’t good enough. Instead, try something like “I want to have $5,000″ saved in my account in five years. I want to save $1,000 per year.”
Let Your Money Work for You
Once you’ve got your bearings, it’s time to start thinking about making investments. Low-risk, long-term investments are the ones that will set you up for retirement.
If you can make long-term investments and hold yourself accountable, your financial situation will adjust in the right direction. While you’re at it, utilize resources like WealthAbility podcast to inform your decisions.
Need More Personal Finance Tips?
There’s a lot more to learn when it comes to optimizing your personal financial planning. We’re here to help you move in the right direction. It’s important to use all of the resources you can.
Explore our site for more ideas on improving your financial future.