Six Steps Of Personal Financial Planning
Six plus six. There are six elements or parts to personal financial management. There are also six steps to follow to analyze your personal financial circumstances, determine goals and actions to achieve them, and then do it successfully. All six elements are essential to arrive at financial security, and all six steps of financial planning are necessary to arrive at the specific financial goals and objectives that we choose. They are:
Step 1: Where Are You Now? Where are you now as to net worth, income and outgo, and all of the six elements of personal financial management?
Step 2: Where would you like to be---generally? What are your financial needs, the general objectives that you want to achieve for yourself and your family?
Step 3: Where would you like to be---specifically? Now you transform those general objectives into specific goals with dollar amounts and dates tied to them.
Step 4: How can you get there? Then choose an action plan. Brainstorm possible plans of action that could make it possible to meet those specific goals. Then choose the action plan with the highest chance of success, that requires an amount of commitment and effort that you can handle, and with the least damaging consequences if you don't succeed.
Step 5: Carry out your action plan. You have chosen the best plan for you. Now is the time to do it. Don't wait; get started now.
Step 6: How are you doing? Nothing ever works perfectly. Times, seasons and circumstances change. Review your progress and make adjustments and improvements. If something is seriously wrong, go back through the six steps. If the action plan is making the progress you want, then keep it going. Re-do Step 1 each year to chart your progress---particularly the net worth statement.
The Need for Financial Planning
Personal financial planning puts you in control of your life.
Financial security is the confident feeling that you can meet your financial needs present and future.
Six plus six. There are six elements or parts to personal financial management. There are also six steps to follow to analyze your personal financial circumstances, determine goals and actions to achieve them, and then do it successfully. All six elements are essential to arrive at financial security, and all six steps of financial planning are necessary to arrive at the specific financial goals and objectives that we choose. They are:
Step 1: Where Are You Now? Where are you now as to net worth, income and outgo, and all of the six elements of personal financial management?
Step 2: Where would you like to be---generally? What are your financial needs, the general objectives that you want to achieve for yourself and your family?
Step 3: Where would you like to be---specifically? Now you transform those general objectives into specific goals with dollar amounts and dates tied to them.
Step 4: How can you get there? Then choose an action plan. Brainstorm possible plans of action that could make it possible to meet those specific goals. Then choose the action plan with the highest chance of success, that requires an amount of commitment and effort that you can handle, and with the least damaging consequences if you don't succeed.
Step 5: Carry out your action plan. You have chosen the best plan for you. Now is the time to do it. Don't wait; get started now.
Step 6: How are you doing? Nothing ever works perfectly. Times, seasons and circumstances change. Review your progress and make adjustments and improvements. If something is seriously wrong, go back through the six steps. If the action plan is making the progress you want, then keep it going. Re-do Step 1 each year to chart your progress---particularly the net worth statement.
The Need for Financial Planning
Personal financial planning puts you in control of your life.
Financial security is the confident feeling that you can meet your financial needs present and future.
