In today’s capitalist society, no one is spared from the constraints of fulfilling one’s financial needs and obligations. Whatever your profession may be, whether you’re a doctor, lawyer, businessman, industry professional, artist, politician, whatever you are, there will always be some financial issue that needs to be addressed. Wouldn’t it be great to be able to get rid of these issues and move on to what you really want to do in life? Unfortunately, we cannot get rid of these financial obligations, however, there are ways to conquer them, all of which can be learned in the often neglected but mind bogglingly essential realm of personal finance.
The steps below are introductions to the steps that you must undertake in creating your own personal financial plan. Each step would be further discussed in detail in succeeding posts.
Remember, it doesn’t matter how much or how little money you have right now, the goal of personal financial planning is to help you overcome the inevitable financial obligations that you will face throughout the course of your life.
The Five Steps in Creating Your Own Personal Financial Plan
Step 1: Evaluate your current financial situation
The first step in creating your own personal financial plan is to evaluate your current financial situation. How much is your income? What are your sources of income? How much are you spending and what are you spending it on? To be able to create a successful financial plan, you must first look at your financial situation as a whole. Remember to be truthful to yourself in evaluating your financial situation as you are doing this for your own benefit, there’s no use in hiding or sugarcoating your expenses.
So how can you evaluate your current financial situation? There are a number of things that you can do; one way is to create a personal balance sheet and income statement. Another is to start keeping track of your daily expenses.