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5 Tips to Help with Financial Planning

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Financial planning means putting your incomes and expenses on a scale to achieve monetary equilibrium or upward mobility on your income levels. Your plan should capture how your current and future risks are covered to protect you from economic uncertainties and losses. Planning helps you to sustain yourself and your family, and so it should be taken as a priority and not a choice. Another aspect of your plan that you should prioritize is your goals either in short, medium and long term and their budgetary requirements.

1. Understand Your Money Mindset

The first tip to having a productive financial plan is to understand your money mindset. If what matters most to you is the present then you fall in the survivor's list. Survivors also include people who tend to have the urge to satisfy their current desires such as a pricey pair of shoes or a sumptuous snack with little or no thought of the financial implications of their decisions on tomorrow.

Achievers are action oriented and are classified as precious. They have investments, shares and bank deposits. Even if they lose their jobs, they still have something they can bounce back on. However, these actions do not portray financial stability because such people lack intention.

The wealthy people are the strategists. They are long term viewers. All their actions fulfill a purpose, and they seek development in all aspects of their life. They don't just pump in money in endless investments but instead have fewer investments that are sustainable and profitable but take time to actualize.

Once you understand which money mindset best describes you, you will be able to draft a financial plan that works for you and your needs.

2. Formulate a Financial Plan

No engineer is complete without his measuring tape just as no electrician is complete without his tester. When you draft your plan on paper, you bring your ideas and thoughts to life. A blueprint of your plan enables you to have a reference for your progress. Start by stating your short, middle and long-term goals and then align them with their expenditure and projected profits. You also need to put into consideration your assets and liabilities and how you can maximize and minimize them respectively to achieve your goals.

Implement your plan and then conduct a monitoring and evaluation exercise as per the set timelines and make adjustments where necessary.

3. Save

The golden rule here is to avoid spending before you have dealt with small/personal debts and bills. Saving does not require you to be earning a lump sum salary. Starting small especially when you are young with minimal responsibilities helps you have enough for investments in the future. Analyze your spending and cut on expenses that are not necessary. It is also advisable to plan for your retirement, even though you might not think about it when you're young. The earlier you start saving, the more financially stable you will be once you've stopped working.

4. Invest in Yourself

The most valuable investment you can make is in yourself. It does not necessarily mean to completely lose you in a classroom trying to amass a good number of degrees. It captures your entire being. Learn to exercise more, travel to different places in the world or your country or attend inspiring and informative talks. When your life gets sucked into these various facets, you get exposed to a lot of things that will eventually guide you in making your financial plan. It is also crucial to build your career and increase your earning potential.

5. Seek Financial Advice

Once you have managed to grow your savings, it is advisable to seek advice from a financial planner to assist you to make sensible investment choices. A wise financial adviser will help you identify the risks involved in potential investments, and provide viable options for maximum returns while helping you achieve your financial goals in the shortest time possible. A financial adviser can also come in handy by helping you prepare a budget. You don't have to seek financial advice from a financial planner only. You can also talk to a relative or a mentor who is good with money.