Personal financial planning involves the careful planning of money and investments for future consumption. Personal financial planning usually includes making a personal budget, saving for retirement, establishing a savings account, and developing a debt consolidation or recovery strategy. All of these actions can be performed by a certified financial planner that is employed to help an individual with their personal finances, but sometimes individuals can also set up their own personal financial planning strategies.
When you are undertaking personal financial planning, it is important to have clearly defined goals. You want to know exactly what you hope to accomplish in your life and how that goal will affect your current finances. You should write down all of your income and expenses as well as any other outside funds you possess. It’s a good idea to keep a running tally of all of your income and assets so you have both a quantitative and qualitative measurement of your current state of finances. This allows you to track your progress towards your goals over time as well as gauge if your personal financial planning efforts are paying off.
Your personal financial planning goals will largely depend on your situation. If you are a single parent making parenting issues a priority, then a financial plan might include working with a family therapy agency in order to find alternative activities for you to do while raising your children. If you are a business owner establishing a long-term retirement plan might take precedence over some short-term goals such as buying a car or obtaining health coverage for yourself or family. Other goals could include purchasing a home or starting a home-based business. Regardless of your personal financial planning goals, making sure they are realistic and attainable will greatly increase your chances of reaching them.