Financial planning is extremely important, whether you are in high school or are approaching retirement. However, many people appear lost when it comes to setting financial goals for their future and achieving them.
There are three steps to successful financial planning, no matter your current situation. First, according to financial coach Ross Riskin, it is crucial to split your monetary objectives into short, intermediate and long term goals. This step is relatively simple. Goals such as getting rid of student debt, purchasing property or building a retirement nest egg can easily be categorized based on their timeframes.
Step two of financial planning is to carefully calculate what you need to do to meet your objectives from step one. Know how much your end goal will cost and assign it a timeframe. If you are successful in this step, you will likely be able to see yourself moving closer to achieving your goal. Without this step, it will be hard to see progress and stay motivated.
Finally, step three is to start putting more into savings and to modify your budget. If you don’t have a budget, consider the advice of financial planner Jon Meyer. He recommends that your paycheck be deposited into one account. From this account, all of your regular bills should be automatically deducted. You can also set up automatic funds transfers to multiple savings accounts. From whatever is left, a set amount can be transferred to your personal account.
Under Meyer’s system, there is no need for a time consuming budget, but you can still keep track of your spending and make progress towards your financial goals. Combine the “Anti-Budget” with good financial planning and you have powerful tools to help you achieve whatever monetary goals you set.