Step 2! Make your Financial Plan!

In my previous post, we learn the importance of  Budgeting, which is the first step in achieving your financial freedom.  I believed that by now, you already assessed and made your own budget to fit your style!  

Just bear in mind and take this as a friendly reminder, you should stick to your budget for you to be a Millionaire! Like? Hehe!

Let's go to the second step in achieving your financial dreams.

   

Throughout our lives, we need a plan to achieve our goals.  If we don’t plan, we are open to mistakes and may lead to misdirection.   

So, how can we avoid it?

 

Have a financial plan!  The financial plan will serve as the blueprint and guidance in achieving your financial dreams!  Here are the steps to have a sound financial plan:

First, Identify!

You must first identify and write down your goals.  Your goal is dependent to your age and personal preferences.  For example, for young professionals, their main goal is to save and accumulate wealth while for those in the mid 30’s to late 40’s, their main goal is to pay home or car mortgage, or to support their child’s college degree.  

Next,  break down your goals!

After you identified your financial goals, you must categorize them based on the time you want the goals to achieve.  In personal finance, the three (3) main categories are as follows:

·         Short Term – you want to achieve this goal about 3 years or less.  This may include saving for a vacation or paying off a personal debt;

·         Medium Term – you want to achieve this goal around four (4) to seven (7) years.  Example of this are saving for a down payment for a house and lot or for a car, or saving for your child education; and

·         Long Term – you plan to achieve this goal around eight (8) or more years.  The best example of it saving or planning for retirement.

Next, educate yourself!  

I encourage you to read books, blogs (like this one! Hehe!), magazines or attend seminars if given a time.  By educating yourself, you will not only add value and learn but also will help you to make successful and sound decisions that will lead to the success of your financial plan.

Lastly, evaluate and monitor your plan!  

You should review your progress daily, monthly or at any point in time you are comfortable with.  By doing this, you will be able to monitor if your plan needs some adjustments or needed re-evaluation to your approach to achieve the plan.

The above steps are just the basic foundation for a sound financial plan.  The most important thing is to do it NOW! START NOW!  Why? Even if you have the best financial plan in the world, if you don't start, you will not achieve your goal.  Always remember, that the best asset to achieve your financial goal is TIME!

 For comments, questions and topics you want to discuss, just hit the comment box below.