How to Begin Planning Your Financial Future

admin — Fri, 05 Feb 2010 01:09:11 +0000

Financial planning today provides major benefits tomorrow, and for the remainder of your life.

Regardless of your current income level or personal situation, learn why you must be committed to the following personal finance strategies in order to secure your financial success.

Planning now for your financial future is, quite simply, a smart thing to do. The tools and process detailed here will pave the way for anyone who is serious about conquering their debt and taking control over their financial existence.

Financial planning is how you get from point A to point B, as well as points C, D and E. Depending on where you are financially today, you no doubt have multiple goals that you wish to accomplish.   “Hoping” for your luck to finally change, or “waiting” for your ship to come in, is NOT a financial plan – it’s simply a dream.

Most people get into a set routine with their finances. The longer you allow yourself to continue down the same financial road without a clear map in hand, the more you lessen your chances of realizing your financial goals.

Let’s face it, most people are not known for their patience or their planning skills, and even less people are admired for their ability to save money.   No one should be surprised to learn this given how the mass media is constantly teaching people in our society to “buy it now- pay later!”

To ensure financial success, people must break away from this destructive, and weak, mind-set.

Do not make the common mistake that financial planning is only for the wealthy, or that you must already have a good sized nest egg before meeting with a financial advisor. Nothing could be farther from the truth.

However, you don’t need to pay out your hard earned money for a professional. The most effective financial planning occurs in the home at the dining room table or home office.

Common tools include the household checkbook, a pen, calculator and a piece of paper with a line down the middle. One column is titled, “Cash Coming In”, and the other column reads “Cash Going Out”.

The main goal to keep in mind is that you want to spend every dollar of your monthly income ON PAPER, before you actually spend it.   This way you will plan your expenditures for the month, knowing you have set aside adequate money to cover all the fixed expenses. In addition, you will have thoughtfully allocated the remaining funds to the areas of your life that are most important to you.

Examples of important financial goals might include:
Buying a new car Saving for a down payment on a house Future college saving Dream family vacation Purchase of investment property Planning for retirement years Regardless of what your financial goals are, your chances of realizing those goals are highly dependant upon your decision to plan ahead and your willingness to take action – right here and right now.

There is a great tool available to anyone who is not comfortable with sitting down and creating a household budget on their own. This important tool is called a Personal Financial Statement.

If you’ve ever applied for a loan or credit card, you have filled out the majority of what is found on a personal financial statement. Starting immediately, you can begin using the same process that a lender uses to account for all monies coming in and going out.

Once you have completed filling out a personal financial statement, you will have all the information you need to take the financial planning process to the level – that is, creating a budget that works!

“Budgeting” gets a bum wrap. No one likes to hear the word “budget”; however, it is the process of budgeting (aka. financial planning) that will ultimately set you free and secure your financial future.   Too often, people make the mistake of assuming “only broke people have to budget”. The reality is that most rich folks are rich because they budget.

The decisions you’ve made up until now are the reason you are where you are today. The decisions you make today going forward will shape your destiny. The only real question is, “Where are you going?”.   Decide well.

By: Richard Gorham

Midlife Career Change – Proper Financial Planning will make the Career Change Successful

admin — Thu, 07 Jan 2010 15:30:51 +0000

Making a mid-life career change is a lot harder than making a career change when you are young. You’ve got a lot more to lose because you may have already worked your way a good bit up the ladder of success at the career you are in today.

Many who have remained in jobs they didn’t like longer than they should have because the job seemed “good enough.” Many times that’s a mistake. When you are forming an assessment as to whether a job is “good enough,” you usually focus on whether the pay and benefits are good. That sort of analysis misses the mark.

What you earn is only part of the total pay package you obtain from the work you do. Your paycheck represents your day-to-day profits. The skills you develop are the result of your long-term research and development project. A company that ignores research and development because today’s profits are acceptable is a company with a less than favorable future. Don’t fall into this trap.

There is a good bit of wisdom in the “Do What You Love” maxim. It really is true that the most financially rewarding jobs go to those doing work that so motivates them that they possess the energy to become the absolute best at what they do.

When planning a mid-life career change, you need to answer the question: When will the money follow? If you don’t get a reliable income stream in place in time, you might not be able to stick it out long enough at the new career to see the benefits of doing what you love ever generate real-world financial profits for you.

You need to have a plan in place before making a mid-life career change. Not just a career plan. You need a financial plan to protect you from the downside risks you take on in making such a dramatic life transition.

There are lots of work issues that need to be taken into account in putting together a plan for a mid-life career change. You need to take tests to learn what sorts of things you are best equipped to do. You need to talk to people now working in the career you hope to enter to see whether jobs in that field are as enjoyable to those on the inside as they appear to be to those on the outside.

Doing that sort of thing is not enough because, no matter how much you plan; you will never be able to anticipate every possible future development that will affect your job satisfaction years down the road. Jump to a new career without putting a financial plan into place to smooth out both the current and future transitions, and there is a good chance that a few years down the road you will be back in the same sorts of circumstances that caused you to want to make the first mid-life career change.

Even career changes that are successful in the short-term are often not so successful after a number of years pass by. You must explore new career options if you are dissatisfied with the career you are in today.

But you must also accumulate the financial resources that will open up options for future changes. Otherwise, you may find yourself five or ten years from now as dissatisfied as you are today but also five or ten years older. Not a good plan.

By: John Groth

Sample financial plan » Mistake

How to Begin Planning Your Financial Future

Midlife Career Change – Proper Financial Planning will make the Career Change Successful