5 Simple But Effective Steps To Successful Financial Planning

The simple truth is that everyone should be planning for the future but that most people don’t. Unfortunately, while financial planning makes sense, it can be difficult to find the spare funds to commit to any plan created. The result is a culture that defers financial planning, leading to many people borrowing or having inadequate funds for emergencies and the future. 

However, with a few simple steps you can rectify this, create a viable financial plan, and successfully stick to it.

  • Know Your Money

The first step in financial planning is to understand what you have coming in, going out, and what, if anything, is left over.  In essence you are making a budget that will allow you to identify where you have money spare and where you are spending money that you don’t need to. 

There are plenty of apps that can help you create an accurate picture of your financial situation.

  • Identify Your Goals

The second step is to identify what your financial goals are. You may be looking to save money for a house deposit or another special purchase. In all situations you should be looking to put three to four months worth of funds aside. This is an emergency fund that will help you to deal with unexpected bills. 

Alongside this, it is never too soon to start looking at saving for retirement. The sooner yo start the bigger the pot you’ll have and the more pleasant your retirement can be!

  • Get professional Help

Having identified your goals you will probably feel daunted by how you are going to turn what you have at the moment into what you want. This is when it’s time to see and expert in financial planning. They will guide you through what is necessary to achieve your goals, how much you should be investing, and where is best to invest it.

With a little guidance you’ll not only know how much to save, you will also know where to save it for the best possible results. 

  • Stick To your Plan

Creating a financial plan is fantastic but useless unless you stick to it. The easiest way to do this is to pay yourself first. This means the funds that need to be invested or saved should be removed from your bank the moment you get paid. 

This can be done via standing orders and you will not miss the money if you don’t feel like you ever had it. This approach makes it much easier to succeed in your financial planning.  

  • Revise regularly

Finally, don’t be complacent! Having a financial plan is only one step in the journey. Your situation will change regularly and you need to review and, if necessary, revise the financial plan to ensure you are reaching your goals and establishing new ones, if needed. 

Once you have started financial planning and budgeting you’ll find it is very easy to stick to it.