As a follow up to my previous article – ACHIEVING YOUR FINANCIAL GOALS THROUGH PLANNING AND LOANS- I decided to create this one. We can never over-emphasize the importance of making a good financial plan and that is the purpose of this article. Making a financial plan involves great concentration and dedication. Below are the ways you can create such a good plan.
CREATE A FINANCIAL JOURNAL
Ideas stored in the brain or mind is only there temporarily, emotions can hamper their shape and sizes. Writing these ideas down is a great way of removing the vague nature of a mind-stored idea. Get a paper or a note and write down your ideas. This gives it the right shape and size and helps you to easily nature them. By placing the journal where you can easily see it and pick it up to read help you concentrate on them and work towards it. But remember to read it daily and also remember to give it the SMART feature i.e. your ideas should be Specific, Measurable, Attainable, Realistic and Timely.
PRIORITIZE
Now that you have your list of goals, it’s time to prioritize them. Give them levels of importance on a scale of say 0 – 10 with 0 being the least important and 10 being the most important. After this create another list with this ordered importance. It should also be advised to give them a time bound or period; this helps it to be more specific and to pick up one goal at a time.
MAKE A BUDGET
It’s time to create a personal budget. Having a budget does not make you a poor man. The rich do have a budget else they would have run out of their resources. Warren Buffet bought his present house 50 years ago and he still cherishes it. It’s a 3-bedroom house with no wall and fence and he says it has all he needs in it. What is the message here? Live within your earnings and how what you want and not what the Jones have. And this is called planning or budgeting. It’s so important that even nations don’t do any spending without first having a budget of the financial year which it should run.
IMPLEMENTATION
After the budget creation comes implementing it. It is not enough to create a budget but to follow it up to the latter. The budget is a blue print of how your spending would be for the period running, so if you don’t follow it up you will be running the “red print” which will always put you in the red making you debt stricken. You can start a savings account, opening a mutual fund, buy a small real estate deal, or even invest in stocks. But whichever you choose to do, always seek the advice of a financial adviser.
REVIEW YOUR GOALS
Now that you have these plans running, you would need to periodically review your journal of prioritized goals or ideas. Are the processes you have set meeting the purpose of you planning. If no, then redefine your goals or implementation method(s).
REPEAT STEPS ABOVE
Next you have to be continually repeating the steps above and you will be on your way up.