PERSONAL FINANCE MANAGEMENT

 

Financial planning is a skill you need to learn and practice a lot because that's what you're going to have to do for the rest of your life. If you do it now, you will feel easier in the years to come.

A. DETERMINATION OF PERSONAL FINANCIAL GOALS

The first step to successful planning is to define your personal financial goals. Start with what you want. What are those wishes? Are they the same as the goals below:

1. Personal debt payment

2. Have savings

3. Start an emergency fund

4. Pay for your children's school fees

5. Save money to buy a new house or car

6. Invest for retirement

7. Save money to buy a vacation home

8. Travel

9. Taking care of children

10. Married

11. Paying for a housekeeper

12. Leaving assets to children and grandchildren

13. Own a Small Business

14. Do charity.

B. GOAL SETTING PROCESS

To achieve your financial goals, you must take several necessary steps. You can follow a simple goal setting process below:

Financial planning: Set goals

1) Define your goal.

Make a list of all the goals you've identified and work on them in order of priority. What is most important to you? How would you like them to be done chronologically? Are there any competing goals?

2) Set a specific time to accomplish the goal.

You can only achieve a goal when you plan a specific time to do it. Otherwise that's not really the goal, is it? Make sure that time plan is realistic and aligns with your goals. “In five years, I will pay for my new house” would be more realistic than “next week, I will be a millionaire.” Unrealistic goals lead to incorrect expectations.

3) Write that goal down.

It's hard to remember your goals if you don't write them down. Write it down on a piece of paper and put it where you can see it every day – by the refrigerator door, for example. Be very specific. Always being reminded of your goals will help you stay focused.

4) Monitor progress.

You'll never know if you've achieved your goal if you don't track the performance. Track your progress toward your goal once or twice a year to see if you're on track. You may need to make periodic adjustments to help achieve your goals. Don't be upset if you have to change your plans because of some minor problems with the implementation.