How To Create a Financial Plan

Since finances and money are difficult to discuss in most families, planning correctly for current and future financial success can be challenging. You can create a secure pathway to your goals with a few simple steps and a lot of troubleshooting.

Define Goals and Success

Your first step should be to define your financial goals and detail what success will look like. The more defined these things are, the easier it will be to see your progress and make the right money decisions. For instance, if your goal is to save for retirement, professionals like investment advisor Frederick Baerenz recommend that you set a specific dollar amount for that goal.

Set a Budget

Your next step will be to set a budget. It is crucial to be realistic with your budget, so you should track your finances for at least one month to determine where your money is going first. Financial planning professionals like the founder of AOG Wealth Management Fred Baerenz, often stress the inclusion of charitable giving when possible. This can help others and give you a spiritual boost.

Save for Emergencies

Be sure to include some emergency savings in your budget. Three months’ salary is the recommended amount, but many financial planners suggest six months or more be safe.

Pay Down Debt

Paying down debt is why most people start financial planning in the first place. Having progressive goals in this area is a safe practice. For instance, you can set a goal to make the minimum on each debt on time, then progress to one percent over the minimum amount.

Invest in the Future

Finding secure investments can be tricky, and the best advice you can follow is to diversify your portfolio as much as possible. If your retirement fund is invested in tech stocks, try investing in commodities, real estate or even fine art.

Creating a financial plan can seem intimidating until you sit down with the paperwork and review the numbers. When you know the steps to creating successful goals, finding the resources and planning to reach them can be more manageable.