Financial planning advice is advice that will help you get organized and track your spending habits to assist you in planning for the long term. Your income is the first place you need to start. Figure out what you make and how much is taken out in taxes each week. Then multiply this by four to get your accurate monthly income.
Write it down on the top of the page so you do not forget. Income, spending, saving, and investing are all an ongoing process and it is very important to understand the basics to make your financial planning a success.
No financial plan is written in stone and must be able to roll with the punches. Times change and your financial planning advice has to be able to change with them. If they do not change with the times then you may get somewhat off track and it may take longer to realize your long term goals.
Your first order of business is to figure out where you stand right now, in real-time. Get the piece of paper you wrote your monthly income at the top of and make two columns, one for a list of your assets and one for a list of your liabilities. This is done to determine your net worth. It will also give you a good idea where your money goes on a monthly basis, too.
The second thing you need to do is set some goals. Now that you know where you are financially, now you need to make some decisions on where you want to be. To do that you need to set some specific, written in stone, goals.
Once you come up with your list of goals, and it does not matter what they are, vacation, cars, RVs, College for the kids, whatever, you need to rate them. Rate them as long, mid- and short term goals. When you reach one of the short term goals like paying off that high-interest credit card, you can celebrate, but just a little.
Always put any monies you free up toward another one of your goals, get rid of all the short-term goals, move on to the mid-term goals, and then the long term goals. One thing to remember, always pay yourself first. Set some money aside in savings every single week. This is the best thing you can do for yourself. It does not matter how much, it will eventually add up and you can use it for whatever you need it for.
Some long term goals are buying that dream car or purchasing a home, sending your kid to college, or planning for retirement. Always make sure you accomplish one of your goals before you move on to the next. Know your priorities, start with the most reachable goals, and work up from there. Do not just fly by the seat of your pants either, set a reasonable timetable to accomplish each goal. Do not rush things. You have heard the adage, “Slow and steady wins the race”? Consider this just more sound financial planning advice.