5 steps of financial planning
- Assessment: Take a look at your personal finance situation by compiling simplified versions of financial balance sheets and income statements.
- Set goals: Decide on your objectives. Is it purchasing a house, saving for retirement, becoming debt-free?
- Create a plan: Determine how you will accomplish your goals. Options could include reducing unnecessary expenses, increasing your employment income, or investing in the stock market.
- Execution: Carrying out your personal financial plan requires discipline and perseverance. You may need to seek help from professionals such as accountants, financial planners, investment advisers and lawyers.
- Monitoring and reassessment: As time passes, monitor your personal finance plan for possible reevaluation and/or adjustments.
Money managementDeveloping strong money management skills can help you use the money you have today to live the life you want now and in the future. As your income grows or your expenses vary, you need to know how to handle those changes.
Some tips to improve your money management strategies are:
- Make sure to revisit and modify you budget when necessary.
- Focus on your savings and build an emergency fund.
- Make it a point to pay down any debt you have.
- Use your credit and credit cards responsibly.