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Life Goal-Setting and Personal Financial Planning
Personal financial planning is something that everyone should incorporate into their lives. “Planning” is the operative word in the term “financial planning.” Without “planning” built into your financial landscape, you will retire without a nest egg (if you can retire at all!), have a wedding with far less fanfare and money than you hoped, bring children into the world without a “plan” (a four-letter word to some) to pay for college and live hand-to-mouth throughout life.
It is not a pretty existence, nor is it one that people typically enjoy. Add that one word, planning, along with the corresponding activity, and you have a life free from many of the hassles and headaches associated with life void of a plan.
Regardless of what age you are, it’s never too late to plan. Admittedly, it’s better to start young, but don’t discount yourself if you are in your twilight years. Set up a plan to carry out your plan. Start a financial diary where you monitor your progress along the way to ensure your financial planning becomes a habit. This will reveal when you’ve achieved your milestones, so you can celebrate, but also show you where you have struggles. Some have described this as a life saver.
To begin, purchase a journal to document your financial planning journey. Keep in mind that you are much more likely to act on a goal when you physically write it down. Also, to have a point of reference, date every entry you make in your journal.
On your journal’s first page write [your name] Life Goals. On the next page or two begin with writing down life goals on each line of the page. Include activities like buying a new car, buying a home, getting a specific type of dog, marriage, establishing a budget, if you don’t already have one, and any other goals that are relevant to your life. Don’t put more than one life goal on each line. Don’t give it much thought, at first. Just jot down each one as it comes to mind.
Now, you’re going to review the life goals you just jotted down, and put them in chronological order on a new page in your journal. Date it at the top. This time, you want to put a lot of thought into the timeline you want these goals achieved. On a fresh page, arrange your life goals in a chronological order that makes the most sense. Again, put only one life goal on each line.
Next, you need to determine how much money you will spend on each. This will give you a basis for planning each event in your life. Add the cost beside each of the corresponding life goals. Primary to all financial planning is a written budget. You have to have a detailed portrait of your finances to understand how to effectively plan for life events.
In your financial journal, place a new entry that identifies all your expenses in one section and all your income in another. Subtract your expenses from your income. What is left is what you have to work with for savings. Determine when you want to have the cash to pay for your next big purchase and plan the savings accordingly.
If you want to have a down payment for a car in one year, determine how much you need to save in that one year, divide that amount by your number of paychecks, then begin to save that amount for the next year. Document your journey in your journal as to how the process is working for you. Do this for each and every purchase you anticipate in life, and you’ll find that you are far less stressed than you ever would have believed possible.
Sherry Zander is a freelance writer who writes for several company websites. Subjects on which she writes include, but are not limited to, personal finance, real estate, estate planning, women’s issues, health and a multitude of other subjects.
If you are in need of a freelance writer for articles, blogs, reports, e-books, press releases and anything else you need written, Sherry is the one who can get it done.
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Financial Planning Importance of Asset Mix
The most important starting point when building a portfolio is asset mix. In fact, it is so important that if it is done incorrectly, the investor stands to not only lose over the course of his or her investment career, but will be subjected to tremendous and unnecessary strain and stress. The right asset mix will help reduce losses to acceptable psychological and, hopefully financial, limits by incorporating the following:
1. Time Availability. By incorporating an investor’s time availability, the asset mix can provide investors with an acceptable level of risk. Most evidently, short-term availability will limit the investor’s investment choice to more conservative investments so that there is little, if any, risk of loss on the principal amount being invested.
2. Investment Goals. By incorporating an investor’s investment goals into the asset mix, financial planners and even individual investors are able to see where they intend to invest. An investor is more growth-oriented will understand that their portfolio will fluctuate, sometimes greatly and will therefore be better prepared mentally to accommodate such fluctuations compared to a more income-oriented investor who would not. Knowing what your goals are is important, so make sure you give the question the attention it deserves.
3. Risk Tolerance. While time and investment goals are very important, someone with sufficient time to invest and a growth mentality will need to have the risk tolerance to support the growth investments. If risk tolerance is low in spite of the investor’s investment goals, then growth assets are normally not recommended on any large scale. Instead, growth would be limited to the point where even the most dramatic fluctuations to that part of the investor’s portfolio would have little or no consequence to the overall financial objective.
An appropriate asset mix will incorporate each of the above factors. Conveniently, these are also the most basic questions one must ask himself or herself when constructing an investment plan; by asking these questions and knowing the answers, an appropriate asset mix can be constructed and the plan can be implemented.
In the event of shortfalls or major discrepancies (such as an investor who wants to save $1,000,000 over a 15 year period but has so little risk tolerance than a maximum annual return of 5% is more realistic than the higher rates earned on growth investments), then changes need to be made to the asset mix. That means the investors will need to re-examine how the three factors above were measured; can they take a little longer to save, can their goals shift to more aggressive, growth-oriented goals and/or can they accept a higher degree of risk. If the answer is no, then they will need to adjust their overall goal.
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Financial Planning For Retirement – It’s Never Too Late
With an ageing population becoming a prominent problem in almost every Western society, and a corresponding lack of state funds to pay out adequate pensions, financially planning for your retirement has never been so important. If you don’t, you could be facing a reduced standard of living that becomes more difficult as you get older. With life expectancy still growing, › Continue reading
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Getting Help From a Financial Planner
If you find yourself a good financial planner they’ll be able to help you out in many ways:
Discovering Problems and Goals – You may be having trouble determining just what it is you want to do with the money you’ll be earning through your investments. A financial planner can help you brainstorm the things you would like to do. They can also point out any problems › Continue reading
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Financial Planning When Someone Dies – What to Do and Who to Go To
A death in the state of Oklahoma leads the decedent’s estate into the probate process and a filing of estate taxes. According to the website of the Oklahoma state government there are three tax forms that need to be completed. Completion of these forms begins with the 35 page Form 454 and it’s 14 schedules ranging from Real Estate (Schedule A-1) to Oil, Gas and Minerals › Continue reading
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Minimize Minnesota Property Tax With Financial Planning
Minimize Minnesota Property Tax with Financial Planning
If you have more than one residential property or one or more business properties then you will probably be familiar with Minnesota property tax rules. Unfortunately, there’s no getting around property tax, but with proper financial planning you may be able to minimize your tax expenditure both while you’re alive › Continue reading
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Financial Planning For Retirement Security
If you are looking forward to your retirement being funded by social security, you are going to have a rude awakening when the day of your retirement comes around. While social security was originally set up as a way to forced retirement savings plan for all Americans, there may not be any money left when you are ready to retire. Worst for many Americans is that they › Continue reading
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3 Basics of Personal Financial Planning – The Entrepreneur’s Success Formula
The Perfect Equation
Right out of the gate every consultant knows that personal financial planning begins by ensuring the amount of money coming in exceeds the amount being spent. When developing a wealth strategy or a success formula, this ratio becomes the benchmark.
Although this article is based upon personal financial management, entrepreneurs know that these principles › Continue reading
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The Most Common Mistakes Made During Personal Financial Planning
It is a sad reality but many people do not properly plan out a proper financial plan and the damage from this can be crushing! Most people tend to think nothing will happen to them because they are still at a young age and they always put off financial planning for another day.
It is time for families to take money management and personal financial planning serious. › Continue reading
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Financial Planning Career
Starting a career in financial planning will take a lot of hard work and dedication to be successful. A financial planner specializes in the planning aspect of finances, usually finance planners focus on the aspect of personal finance rather than investments and insurance. This is an extremely lucrative career because of the increase in college graduates who need help after graduation forming a budget to pay back loans. A financial planning career requires extensive knowledge in the finance sector, ability to set and help assist in clients sustaining financial goals and helping clients build financial security.
Knowing the finance industry is a must for any financial planning professional. This career requires substantial knowledge in finance because it directly affects an individual’s spending and saving habits. A bachelor’s degree in finance is a very effective way to showcase your knowledge in the field. Having a 4 year degree will allow you to find the necessary experience with jobs and connections with other successful financial planners. This will only add to your credentials when you officially decide to go into a financial planning career. A finance concentration is offered at universities across the country and they will provide you with the necessary knowledge to success as a professional financial planner.
Once your education and experience reflect that of a successful financial planning career then you can start accessing your abilities to further advance your career. It is important that you understand the process of setting financial goals for your client. This includes potential budget concerns and strategizing spending habits for a certain period of time. Your main priority it to ensure that your client will meet all possible financial goals they desire without losing money in the mean time. A financial planning career can become demanding so it important that you and your client have a significant trust in each other.
The next step to a successful financial planning career once you have set a strategy for your client is to build their future. Financial planning does not stop when the goals are met. This career allows you the ability to help individuals or business owners to find some financial security once they choose to move on to retirement. Also, this step will help with creating college funds for your children and ridding the worries of healthcare. A financial planning career is rewarding for the simple reason that you have the chance to help people secure their future.
Financial planning is a multi-step process that will allow you to access your client’s particular financial situation and make the best decisions to help them. A Financial planner career will take a lot of work and research but if you are up for the challenge it can be a very powerful career to pursue. Finances are a major part of society and it sometimes takes professional help for you to handle it correctly. The growth of risk takers seems to continue to increase everyday and with risk takers there will always be a need for financial advice.
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Recent Posts
- Life Goal-Setting and Personal Financial Planning
- Financial Planning Importance of Asset Mix
- Financial Planning For Retirement – It’s Never Too Late
- Getting Help From a Financial Planner
- Financial Planning When Someone Dies – What to Do and Who to Go To
- Minimize Minnesota Property Tax With Financial Planning
- Financial Planning For Retirement Security
- 3 Basics of Personal Financial Planning – The Entrepreneur’s Success Formula
- The Most Common Mistakes Made During Personal Financial Planning
- Financial Planning Career