Financial Planning, where everything is checked out
Whether you are just starting to learn about financial planning or you are wanting to consider money management with a fresh approach, let's look at what Financial Planning entails:
- Establishing financial goals, short and long term
- Creating a realistic budget based on earnings, spending, savings, and financial goals
- Investing some of your savings to make your money work harder for you towards your goals.
1. Setting Goals
Financial planning first starts with establishing goals, small-ticket goals, and big-ticket goals:
- Small-Ticket Goals have short term aims in mind, they often involve saving for smaller items such as electronics or paying off minor debts
- Big-Ticket Goals are aimed for the long term and are usually more expensive. Common examples include cars, homes, travel, retirement, and wealth accumulation.
Financial planning works best when it's designed to meet clearly defined small-ticket and big-ticket goals. Learn more about setting Financial Goals HERE
2. Budgeting
Once you've determined your goals you plan how to meet them by developing a budget based on your earnings, expenses, and any existing savings. Budgeting is what this site is all about because it's the element of financial planning that people often need the most help with. It's a difficult part of financial planning for most of us! It can require willpower, self-discipline, and delayed gratification which all sound like no fun, but neither are the alternatives such as financial stress, debt, and unmet dreams and goals. We've designed our budgeting program to make it motivational and easy, we hope that perhaps you may eventually get to where we're at where we actually *enjoy* budgeting and financial planning. If you haven't yet, get started on Your Budget Plan right now.
3. Investing
With inflation and the costs of living always on the rise, it could be argued that saving isn't really saving unless you're investing your money in a way that increases its value over time. This is especially so for longer-term savings towards bigger ticket goals. If your goals include saving for retirement, setting yourself up with a financial cushion, wealth accumulation, or any other big-ticket goals that involve saving money over a long period of time, you should really invest those funds in a way that keeps your money working and earning for you.
If you're an experienced and successful investor this information will be nothing new for you and it's not within the scope of this site to provide advanced investment strategies, but if you are new to investing as a component of your financial plan we can help you figure out how to get started HERE.
In a nutshell
Financial planning can be broken down into three phases: Setting Goals, Budgeting, and Investing. There are two main types of goals that determine the rest of the plan, small ticket/short term goals and big-ticket/long term goals. Once you've clearly determined your goals you develop a budget plan to meet those goals. If you plan to save towards longer-term goals, learn how to invest your money to make it work for you, particularly in order to build wealth.
Learn more detailed Financial Planning Steps
Go to our Budget Planner to get Started