The Guide to Financial Planning

In the era of advancing technology and more access to help and resources, we are at the prime time of using those resources to plan our finances without much hassle or stress.  This guide will help you learn ways to maximize your budget, ways to save money, and the different myths and rumors of Financial Planning.

What is financial planning and how will it benefit me?

Let’s be honest. At the thought of financial planning, it’s often categorized with something only the wealthy could afford. But you don’t need to be wealthy to have the same benefits. Financial planning prompts you to examine your current finances and long-term goals, which will help you to prioritize spending and investments to achieve such goals. Financial planning is taking the money you have now and applying it to your long term goals. Using financial planning to your benefit can not only help you save for future goals but it can help ease the finances of everyday life, stress free.

The myths of financial planning

Guide to Financial Planning

With the resources at hand it shouldn’t be that hard to strive for better things, especially something that could help you save money and benefit your future goals. Here are the top 3 myths holding people back from starting their financial planning.

  • Number One: Financial planning is only for the wealthy. While money is a big factor, financial planning is for anybody wanting to make that positive change in their life and manage their money to achieve their dreams. Don’t let this daunting myth hold you back. With the time and dedication you can accomplish anything, including managing your funds!
  • Number Two: Financial planning costs too much money. While you can pay for professional help on financial planning, you can just as easily do it yourself. There are tons of free tools you can use to your advantage, such as retirement calculators, robo-advisors, and budgeting. Anything is possible, especially in this day and age where we have the internet at our disposal.  
  • Number Three: Get a Plan, and you’re all set. You can’t move a mountain in a day. Even with you creating a financial plan, all your financial troubles aren’t just going to go away in the blink of an eye. You have to stick with the plan, follow up on recommendations, and practice good spending habits. It’s important to keep those tips in mind and keep up to date on your financial plan. Chances are that with life being unpredictable and able to change, so will your plan. The best example to give is that your financial plan is like a houseplant. You can’t just water it once and expect it to blossom and grow into something amazing. You have to keep up to date on it everyday so that it can have that chance to grow.

Keep in mind that there are always going to be setbacks and challenges to go through just like anything else in life. Stick with your plan and stay determined.

Budgeting

Guide to Financial Planning

Budgeting very well might be the toughest part of financial planning because you have to work with it day by day. We all know some form of budgeting, whether it was saving up money from paychecks for a concert in highschool or taking money out of each paycheck for some sort of goal, budgeting can be simply put as where to put your money and what to do with it at the end of every month. Here are some tips on different budgeting techniques that can make your life a whole lot easier.

  • A Zero Based Budget. What this means is before the month even starts, you’re making a plan and giving every dollar a name. Don’t let the name of this tip scare you, it doesn’t mean you have zero dollars in your bank account, it just means your initial income minus all your expenses (outgo) equals zero.
  • The important categories first. Giving and saving are at the top of the list, and then comes the necessities—food, shelter and utilities, basic clothing and transportation. Once your necessities are taken care of, you can fill in the rest of the categories in your budget.
  • Make a schedule and stick to it. While you’re making a budget part of your monthly routine, why not pick specific dates for other expenses? Set up auto drafts out of your checking account to pay bills, and buy your groceries on a set day every week or twice a month. When you know what to expect and when to expect it, you take a lot of hassle and potential stress out of the picture.
  • Try an online budget tool. If pen and paper (or spreadsheets) aren’t your thing, it’s time to join the 21st century and use a budgeting tool. You can focus on planning a budget and tracking your spending from the comfort of your smartphone or computer.
  • Have goals. Whether you’re paying off student loans, building up your emergency fund, or paying off your mortgage, you need to focus on your why. What’s the reason you’re making these sacrifices.

Finally, the best ways to save money

Guide to Financial Planning

As we’re finishing up this guide, we saved the best for last. Having money is amazing but saving money is even better. While it may be difficult at the time, not having all your money to your full advantage, think of all the good things that can happen because of saving. Whether its a spontaneous trip, a heartfelt move or a family emergency that needs immediate funds. Having money put away and saved can reap many benefits most people don’t realize. While we realize saving money is easier said than done, here’s the best tips to help you save your funds almost stress free.

  • Record your expenses. The first step to saving money is to figure out how much you spend. Keep track of all your expenses. That means every coffee, household item, and cash tip. Once you have your data, organize the numbers by categories, such as gas, groceries and mortgage, and total each amount. Having a solid record of where your money goes can help you figure out where you can make cuts in your budget to save.
  • As this one has already been stated we’ll keep it short. Make a budget! Know when to cut off your spending habits.
  • Have a goal to save towards. Everyone knows that pushing yourself towards an end goal will help keep you motivated so you can accomplish something. Use that to your advantage with saving money. Pick a goal, find out how much you need to save, and how long it will take you to reach that particular goal.

Financial planning doesn’t have to be this big stressful battle. Use all the tools you can find to your advantage, stick with the plan and stay determined! Anybody can do financial planning, why not you?

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