Every people supposedly has financial planning as a guidance to manage the money. It is not difficult to makes the financial planning. Seek out the information about financial planning from the book, magazine, internet and else. You can read the example of the financial planning. You can adjust it with your financial condition. Do not use the sample because it may be different with you.
Each people are different. For the rich people, they can spend so much money but for poor man, they should keep the penny.
Here is how the beginner can create a good financial planning:
1. Setting the goal
The first thing that you should do is to set the goal. Each of us is different and unique. We have different mind in setting the goal. Some one want to become the doctor, some others want to become a pilot. The different goal means the different ways to reach. A man who want become a doctor must provide more money than others who want to become a pilot. Studying in doctor need more money and time.
The goal should be fit to the financial condition. Do not dream of become a very rich man, reminding you just ordinary people. You will be difficult to make it come true. As an ordinary, we can set the goal to reach wealth. We can find the job at an office. Alternatively, you can open a business to get the money. Sometimes opening a business is better than getting a job.
We can setting either short term or long term goal. Short term refers to the goal that you can reach in short term, such as, buying gadget, paying the short term debt and else. Surely, you should consider why you buy those items. Perhaps the items help you to make money. For example, an internet marketer must need sophisticated gadget to promote the content via social media.
The Long term goal is something that we can reach in long term. We cannot reach in short term easily. For example, we want to hold one million dollar next 20 years. You must sure that your goal is attainable. Surely, you can increase the goal if you believe you are able to attain the goal.
Without a goal, you must be difficult to build a budget. You will have no plan because you have no aim to go. Therefore setting a goal is very important in financial planning.
2. Build a budget
A budget is the tool that is important for financial planning. The budget helps you to manage money to reach your goal. It records all expenses in one month. For the next month, we can share the money to the spending items such as food, mortgage, credit, utility bills, kid school fee, and else. List the details any food that you eat in a month. It is include cereal, vegetable, meat, fish, milk and others. You must have the bon from the grocery or store. You have better to keep it so you can count your food spending accurately.
With the budget, you can save the money monthly. You will not spend out the money before the end of the month. Some employee has spent out the monthly paychek before the end of the month. They do not know how to use money well. They spend money without a plan before. They also follow what they want. For example, when a factory launches a new cell phone, they buy the product whereas they still have a good one. They want have a new one to show it to their friend or family. Supposedly, they buy the new when the old damage or lose.
After making a budget, you should also be disclipline. Do not spend any items that you do not write down at the budget. For example, you should not buy the stereo or DVD, because you have not plan to buy the electronics at the month. Plan to buy the DVD for next month so you can buy the dvd for the next month. You can punish yourself when you break a rule. You can reduce your entertain or leisure spending if you breaking the budget. You can allocate the spending to cover the shortage of the budget.
3. Take the action
You can earmark the money for saving that is important for your future. When you do not work, you will get so much money from the retirement fund. Some old man cannot save when they young so they must work whereas the physic is not strong anymore. It is not difficult to save your money. Allocate only one percent of your money for saving today. You can increase the percentage when your salary increases. The saving is important for short time. When your boss fired you, you can use the saving to fulfill your daily necessity. You can withdraw you saving until you have a good jobs or other income source.
Do no stack your money on saving only because the return is low. You are better to invest your money for the future. Yes, the investment return is not good today but someday the investment will return on the track. After the great depression, the sock return gave high return he investors. I believe the stock will give the high return next time.
Investment is not only stocks and bond. We can also invest our money in real asset. The cattle may be a good investment too because the female cattle can bear one baby every two year. You must buy the land for shepherd. You can also consider sheep or goat. Those animals could bear two times in a year. Each female can bear 2-5 babies. The population of your sheep or goat can double in short time.
The farm land is also important too. There are some precious commodity such as corn, wheat, soy, and others. It must need large farmland to produce those commodities. You can start to buy small area first.