Many people don't know what financial planning actually is. Well, it's not a silver bullet, a magic incantation, or a super elixir that cures all money woes. Financial planning is, quite simply, an ongoing process that you establish in your life to regularly address and manage your money. It works step by step, over time.
There are many many processes out there, with different steps and different approaches. But I think they are all basically the same:
1. Organize - Get organized. Write down your financial information into an easy to understand (for you) format. How does your income compare with your expenses? How do your assets (assuming you have any) stack up against your debts (I hope you don't have much!)? Once you've gotten organized, you can begin to think about what you need to do.
2. Make a Plan - What should you do about your finances? You've organized and looked at your situation. What needs to be done immediately? Over the next year? Over the next three years? Write these to do's down, with dates. Put the dates on a calendar.
3. Follow the Plan - You know, of course, that none of this work will amount to a hill o' beans if you don't follow through and actually do the to do's on your list, right? Do what you need to do in order to help your ability to follow through. Get a a friend or family member to help you stay on track. Put big encouraging notes on your calendar. Set up reminders on your smartphone or online calendar. Do whatever works for you, so long as you follow through. This is a process that will help, over time, if you stick with it.
4. Repeat - Same time next year, go through the process again. Before you start rolling your eyes and sighing dramatically, you should know that this gets easier each time you do it. You get more organized and understand things better. But, the most important thing is that you do this process year after year. You can't change everything in one hour or one day. But you can make some big change in a year. In three years, you can begin to turn things around. In five years or more, you can change your life.
Develop a plan that seems like it will work for you. Stick with it. Tweak it over time.
Good luck! You can change your whole life, step by step.
There are many many processes out there, with different steps and different approaches. But I think they are all basically the same:
1. Organize - Get organized. Write down your financial information into an easy to understand (for you) format. How does your income compare with your expenses? How do your assets (assuming you have any) stack up against your debts (I hope you don't have much!)? Once you've gotten organized, you can begin to think about what you need to do.
2. Make a Plan - What should you do about your finances? You've organized and looked at your situation. What needs to be done immediately? Over the next year? Over the next three years? Write these to do's down, with dates. Put the dates on a calendar.
3. Follow the Plan - You know, of course, that none of this work will amount to a hill o' beans if you don't follow through and actually do the to do's on your list, right? Do what you need to do in order to help your ability to follow through. Get a a friend or family member to help you stay on track. Put big encouraging notes on your calendar. Set up reminders on your smartphone or online calendar. Do whatever works for you, so long as you follow through. This is a process that will help, over time, if you stick with it.
4. Repeat - Same time next year, go through the process again. Before you start rolling your eyes and sighing dramatically, you should know that this gets easier each time you do it. You get more organized and understand things better. But, the most important thing is that you do this process year after year. You can't change everything in one hour or one day. But you can make some big change in a year. In three years, you can begin to turn things around. In five years or more, you can change your life.
Develop a plan that seems like it will work for you. Stick with it. Tweak it over time.
Good luck! You can change your whole life, step by step.
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