In this day and age with the economic climate and the government cutting state funds left right and center it’s important to plan your personal
finances. Following these 5 steps will help get you off to a good start:
- Assessment: List all of your outgoings and income making a note of essentials and luxury spends.
- Set goals: such as you want to retire by x date or you want to buy a house or pay off your mortgage / credit cards / loans by x date or set a goal to save a certain amount each month / year. You may need to plan ahead for your children’s education or retirement. You may also want to save for unexpected events such as illness or loss of income. You should also take to consideration smaller but still substantial purchases such as cars or holidays.
- Create a plan: Detail how you plan to achieve your goals – reduce expenditure, increase your income or sell assets. Also factor in any changes to your personal finances such as work bonuses, wage increases or redundancy or loss of benefits and create a contingency plan
in case of this for example you could schedule a holiday if you have some unexpected income or what you could do to reduce your outgoings in the event of a loss of income. - Execution: This is the tough part – put into action step 2 and 3. You might want to consult an accountant or financial advisor to help with this step.
- Monitoring and reassessment: It goes without saying that you need to keep a close eye on your financial situation over time and reassess your goals and plans regularly.