Financial Planning – “Go always with what you need, instead of what you desire or want to have in your life” even when the matter is associated with your funds and finance.
Furthermore, this above-mentioned statement not only can teach you many things in your life but it has also potential to regulate your investments in the best ways for leading satisfying financial life, as you must be aware that investing without a second thought can lead you to various unbeatable challenges which sometimes do not give a second chance to reform a situation.
Nevertheless, financial planning sounds quite a technical term to many ordinary people who have nothing to do with business, finance and incomprehensible terms except businesses that specifically deal with finance and funds on a large scale.
Therefore, we have come up with this guide will help you realize the significance of managing money in your life and prepare yourself for the upcoming crises as we know that troubles and crises are not predictable at all. Besides, numerous ways and methods will be taught and discussed too to improve and make financial planning.
What Is Financial Planning?
Also, to sum it up in one simple statement financial planning seems like the following example you can read below.
Consider thoroughly, before you spend your money on something (including its pros and cons) + then analyze how much will be left for further useful investments = financial planning.
The definition of financial planning can be said and described in various terms which hold lengthy and quite difficult technical terms but to make you understand, we can also say that regulations on your cash flow where you have to decide how much money and in which direction it should be going is simply called financial planning as of course, we come across many people who earn a large amount of money from their job but lack how they should spend it wisely.
For example,
A desire to replace your old well-functioned car with the latest launched car in the market is one of the examples of bad financial life.
Straightforward Steps And Procedure To Be Followed for building a better and satisfied financial plan
Creating A Budget – First Step Towards Financial Planning
Budgeting acts as one of the rules and regulations for money that directs it on how and where your money has to go. It simply keeps your irregular spending habits in limits and differentiates between your desires and requirements.
Avoid creating a budget is one of the financial mistakes that various people make despite earning a huge amount of money as budgeting seems unattainable and troublesome task to them.
But hold on! In this advanced era of technology, there have been popped up various free tools and software which you can use to make your budget for financial planning and some of the free tools for budgeting are mentioned below:-
Free Tools To Create Budget
- Mint – widely used budgeting app created by Intuit you can use at free of cost that requires no certification to experience its features. More importantly, not only help you create a budget but also assist on how to make investments on a daily basis form purchasing pencil to groceries for home and make you remember your every small to big investments.
- Pocket Guard – An Suitable App For iPhone And Android – Puts regulations on your spending and demonstrates the pictorial representation of spendings.
- You Need A Budget – YNAB: Name is quite enough to describe features and functionalities for budgeting and also offer online learning for money and financial planning along with free introductory classes.
- Wally – Specifically targets budgeting by offering tracking features for income and expenditures with notifications and alerts for due bills or payments.
- BUDGET – Quite popular app to keep a record of investments for iPhone users only.
As the market is full of numerous tools, software, and apps for
How to create a budget to plan your finance
Analyze And Calculate Your Expenditure
For making an effective budget just calculator or any other tool you like and evaluate the expenditures you do each month as we know that many of the expenses are needed to be done such as investing in your insurance and mortgage by making regular payment of every month.
- Figuring out your income that leads to your healthy financial life for every month. And if you lack earning a needed amount of money then it is high time to find and search for more sources to earn money in order to fulfill basic needs and requirements.
- Paying Off Your Debts can really make you feel that you have taken off the burden off your shoulders as it is always good not to have any debts.
- Keeping Record Of Investments And Progress will always keep you on a systematic way to improve and maintain your financial life.
Taking Down To Your Notebook Everything You Acquire with money
What accomplishments you want by using your money or cash is one of the best and most suitable ways you should adopt to put a question mark on your needs and requirements. To have a basic and clear idea of your short-term and long-term needs can make you sought out. Which one is required to be done first when you have left a very small amount of money for making investments to fulfill your needs.
Following questioned will be raised In your Head when you note down every requirement to be fulfilled
- What required things must be fulfilled first and recognize your short-term needs?
- How Much I Have Left For Next 5 To 10 years when prices of needs from small to big will touch the sky?
- What are your plans for a long-term basis? When your children will be grown-up and their requirements will change with the times.
Recognize Where You Are Standing Financially Right Now By Net worth
It is important to create a net worth statement to track and find out your financial position. And it is basically a balance sheet where you perform some following activities to track your financial statement.
- Write and add your assets and possessions. Such as bank and investment accounts, real estate and valuable and precious personal property.
- Now the second thing we specifically do list out our debts. Such as a mortgage, student loan, home loan, credit cards everything you are liable and responsible to pay off.
- Ultimately, it is time to deduct and subtract all your liabilities from your assets.
- Lastly, you will know your position whether it is plus or minus.
Create more than one sources for earning
If you are not satisfied and not able to meet all your needs and requirements with one source of earning. Put your efforts and hard work in various sources to make sufficient earnings. As there are various you can choose to do whether it is offline or online.
Most of the online sources of earning cost nothing except the requirement of a reliable PC with an internet connection.