4 Steps To Create A Financial Plan

Written by on June 27, 2012 in Money - No comments | Print this page

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Develop a financial plaon

Before doing any saving or investing it is necessary to develop a sound plan that fits your own budget.

People don’t plan to fail; they just fail to plan.

Having a sound plan is necessary to accomplish anything. This is especially true with personal finance. There are many different strategies to reach financial independence. They can all work, buy a person can’t bounce and forth between them and expect to have positive results. Instead it is important that, before doing anything else, you develop a plan that is right for you. Then stick to it.

There are 4 steps to developing a stable plan.

  1. Decide what it is you want. Are you saving for retirement? Are you trying to get out of debt? Are you trying to get rich? You must figure out what your financial goals are, before you can ever hope to reach them.

  2. Learn about different strategies. Learn about credit card balances, debt management, retirement saving plans, home refinancing, etc. The internet is full of sites dedicated to helping people with financial management find some of those sites and start reading. Read as much as you can. There is nothing magical or overly difficult about saving and investment, so don’t ever be frightened by the task in front of you. People like Dave Ramsey and Suze Orman have television shows, radio programs, and books dedicated to specific step-by-step plans.  They are a great place to start for people with no experience that want a single clear guide for saving.

  1. Break your goals into smaller, specific and more manageable chunks. For example if your goal is a comfortable retirement you should consider putting 15% of your income into a 401k. Or you could consider looking for a higher paying job, or one with better retirement benefits.  Smaller goals chart a clear course to reaching larger goals.

  2. Chart your progress. How is the plan working? Are any changes necessary? At regular intervals you need to ask yourself those questions. While you should try to stick with a single plan and not just do things at random, you should not stick to a plan that is not working. Most of the time only small changes are needed to get the plan back on track.

Only you know what is right for you. So get started on developing that plan because the sooner you get started the easier it will be.

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About the Author

Matt Brand

Matt Brand is QLR's money saving expert. His experience with credit cards and student loans have made him take a strong interest in personal finance, saving money and sharing his knowledge. He is passionate about teaching others how to avoid the trap and make smart financial decisions. View all posts by Matt Brand.