What Should be included in Financial Plan

People should make financial plan that is important for them. With the plan, you will know how to reach wealth. You know what you can prepare for to reach wealth. Without planning, we do not know where we go and we must lose in journey. When we go to in a place, we must prepare the map. We can choose the vehicle to go there. For example, you want to go to a place by car, bus or train.
To make the financial plan, you should include some essential or important element. In financial planning you should also include:

Figure your financial self
Check your financial health. Is the asset higher than the liabilities? Can you fulfill your daily necessity and month spending? Some people has high income but they cannot fulfill their spending. They spend too much money than they can generate.
List the entire of your asset. You may have a house that you stay inside. Guess the value of your house in dollar. You can see the price of the house today. Then, add your car as your asset too. Include the stock and precious notes as your asset. Count the market value of your stock or bond. Perhaps, you save some gold bar at the safe deposit box. You should record it as your total asset. Sum your entire asset.
List also the liabilities. You may have credit card debt, lease car, debt to other people. Record when you will settle the debt. Sum of all liabilities list and compare to the assets. If your asset higher than the liabilities, you are wealth. If, on the other hand, the liabilities is higher than the assets, you are not wealth.
Reach the wealth by reducing the liabilities. You can pay the debt soon for it. Do not borrow money again before your financial condition health. The debt cause your financial worst because you should pay it periodically.


The goal
What is the goal of your financial planning. People goal is to reach wealth. However, this goal is not clear. What is the definition of wealth? Each people have meaning. Some people think the wealth is a man whose has so many houses. Others people said that wealth is money.   We should have a clear goal. For example, we want $ 1 Million for next ten year.
The goals should be attainable. Consider the asset and your net worth. If your net worth is small, you should not set the goal too high so you cannot reach the goal. Calculate the money that you can get in specific time. We should be optimistic but we should able to calculate our ability.
The goal is also realistic. The employee should not set the goal to travel around the world. A common employee should think to reach wealth not leisure. They can set the goal to one place only where they dream to go there.

The budget
Budgeting is very important in financial planning. This tool can help you to reach the goal by the net worth that you have. A budget describe how much income comes to you and how much spending go out from you. Therefore, you can manage the money well.
The useful of budget is to earmark some money for the goal either short term goal or long term goal.For example: We want buy playsation next year. We can make the budget for buying the playstation. Earmark $30 per month, so you will collect $360 at the end of the year.
Making budget is not difficult. You can write what you can spend the last month. There are some spending items such as food, cloth, apartment rent, and others.  We have to eat everyday but we do not have to eat the restaurant because it is very expensive. We can cook the food in our kitchen tha is cheap and is also health. 
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Should I buy or rent the Item?

I saw a parent parent pull out the baby cart in the park. It must be expensive because it has nice design. Surely, the parent just use it for two or three years. They will store it to the warehouse when the child can walk. It is not good to spoiler the kid with baby carriage.
Saving it the warehouse will make your warehouse full. Some parent may sell it or give to the familiy or foundation. If the parent have so much money, they can buy any baby cart.If, on the other hand, the parent has little money, they should consider buy the baby cart. There some factor that you should consider before buying something. You can rent something when the cost is cheaper. The parent can hire the baby cart when is cheaper.
Some company also rent car or office to reduce the cost. They do I o increase the profit. Surely, they make calculation before decide whether to buy or rent. By buying, the item, the company owns the asset but they should need much money. By hiring, they can minimize he cost but they do not own the items. However, in long term the company should pay the high rent fee. They Here are the costs that you should consider:

1. How long you use the assets?
As I have told in first paragraph, buying a thing that you just use for one or two year is wasting your money. You are better to hire the things from the store rather than buying it because you will throw it. 
Using the baby cart is only for two or three years. After your chicle big, you should trash it. Unless you have other baby, you can use it. In my country, some parents hire the expensive toys for the kid. It is cheaper than buying. A kid will be bore to play the toys and the parent can return back the toys.
 We use the house where we stay forever. That is why we should buy it. Renting the house forever is very expensive. You must spend money for renting.

2. How much the resale price?
Can we sell the items at high price? Unfortunately, the price of most assets will decline except the antique things and property.  The buyer will not buy the old items at the similar price to new items. For example: The used book price is half of the new one. The gadget price also decline after the new model release.
However, some old items price is not much different with the new one such as car. The price is only slightly different to the new one as long the condition of the car is good.
3. How frequently you use it?
If you often use the items, you need to buy it. For example, you use the gadget everyday so you are better to buy it rather than hire it. By hiring the items that we often use, we have to provide more money or we should pay more.
Sometimes we hire the tool box to he neighbor in order to fix something. If you use he tool box often, you are better to buy the box. It is not polite to ask he toolbox o your neighbor frequently because they also need the box.
On the other hand, If you rarely to use it. For example, you read the comics or magazine only once. You are better not o buy the items. You can hire the comics or you can read the comics at the library. In Japanese, the people often throw the new comics after read it. They do not collect it due the house and apartment is so narrow so they have no space or warehouse to keep the comics.
4. Is the items important for you?
Some people often buy items that they do not need it. The discount temp them to make the items or they buy the item because the friend or neighbor buy it. Supposedly, every people buy any item that they need.
As yourself about it? When we need something, we should buy it. For example, The writer will be difficult to write if they have no book. They need some book as the reference so they can write.  A student also need book too. Without a book, they cannot learn the subject.
You are better to buy the book rather than rent it.You can buy the used if you have no money. With the book, you do not need to worry the librarian asks you to return the book.
Some people cannot distinguish between need and want. They buy anything that they want but they do not know what the item is.
5. The cost of the item
Is the item too expensive that you can buy it? I you have much money; you may buy any item that you like. You can consider the cost of item too. If we buy car we also spend money for the car too such as gasoline and repair. We have to repair the car machine after 40,000 kilometers. We should also change the engine oil too. All cars have wheel that you should change periodically.
We should provide a space that is called garage for the car. We may not spend money for the garage but he opportunity cost of a garage is also high. We can rent a garage for $500 a month to other people. Some people use their garage as their business headquarters.
When we park he car in parking are, we should also pay the fee. Some place charge high parking fee. You are better to hire a car if you have no money.
Closing
You have to consider before buy or rent something. Consider the profit or the loss. Consider of all aspect not one or two aspect only. Sometimes we can ignore one factor. For example, though he resale price of gadget is very low, we should buy it. I have never hear any company or people who lend the gadget.