Personal Finance Plan

Personal News Magazine - Personal finance plans are great tools in managing your finance provided you put them together effectively. You don't have to be a professional to put together an effective financial plan, who better to understand you financial needs and wants than you? Here are some tips for writing your personal finance plan.

Tip 1 - Make sure your budget is realistic.

The first place to start when writing a personal finance plan is your budget. Without a budget you have nothing to plan from. For your finance plan to be effective your budget has to be accurate. Make sure you allocate spending money, this is one are where most people underestimate. The simplest way to approach budgeting is to ensure you spend less than you earn. Actually not as simple as it sounds as most of us have credit cards and credit cards allow us to spend more that we earn.

Tip 2 - Stick to your budget.

OK, so it's great to have a budget, but you have to stick to it or your finance plan will fall apart. Trial your plan for a month before writing your plan just to make sure you an stick to it. Change where necessary. A great way to budget is to review your last 3 months bank statements and take an average of those.

Tip 3 - Set realistic goals.

It's important to set realistic goals when writing your personal finance plan. Some of us have simple goals like pay off the credit card, reduce the mortgage etc, others more elaborate like retire at 40 a millionaire. Make sure all of your goals are achievable. Sit down do the sums and work out how long it really will take to do things you want to do.

Tip 4 - Be thorough

Be thorough with the 'how', it's great to have goals but you have to find a way to reach your goals. Make sure you plan thoroughly how you are going to reach your financial goals. You may find this is where you could speak with a professional, someone that can advise you the best way to make the money you need to accomplish certain things.

Tip 5 - Review

Make sure you review your plan often. It's best to review if you get a pay rise or a new job, if you get married or divorced, if you have a child or children etc. It's likely that over time your goals will change or you may reach a goal ahead of time so when this happens review!



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