Have a Personal Financial Plan
Here are few tips that you would find useful when you are working on a personal financial plan. While creating any plan - whether it is related to finance or not, you should have your vision, mission and tactics clearly set in your mind. You should know where you are today, where you want to be and after how much time. Following points should be taken care for Personal financial planning:
1. Assessment: While doing financial planning, you must first assess your current financial condition. Its critical to know where are you now. The assessment part can be done by formulating balance sheets and income statements. The personal balance sheet would essentially have the assets on the one hand and liabilities on the other. Assets will include movable as well as immovable things like car, house, stocks, mutual funds and bank accounts. Personal liabilities include credit card debt, bank loan, mortgage etc.
2. Goal Setting: After having done a proper assessment of the financial situation, an individual can set up long term as well as short term goals. Setting an investment goal is just like choosing a travel destination. You are trying to get somewhere with your money. If you don’t know where you want to be, you won’t know how to get there, as simple as that.
3. Creating a Plan: Once the long term/short term goals are set, appropriate strategies should be formulated in order to fulfill the goals. This could be achieved by cutting down on unnecessary expenditure or by expanding the income level.
4. Execution of Your Plan: When you plan a trip, once you know how far you have to travel and how long you have to get there, choosing the vehicle and the route to take becomes very easy. First look for investment options www.istanaking4d.com that at least the potential to get you to your goal on time. If your goal is short term, you must be using fixed return instruments. If your goal is long term, you can look out for other investment instruments which can give you better returns (though risk level would be higher). For proper implementation of the financial plans individuals may seek professional help from financial planners or investment advisors.
5. Monitoring: The financial plan of an individual should be monitored and reassessed from time to time which is very crucial to understand if you are going in the right direction and at right pace.
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