financialtreat – will explain about How to Make a Personal Financial Plan that you will get in the following article. let’s look at this article carefully!
In order for you to have healthy finances, we must be able to do personal financial planning properly. But there are still many people who want to do but don’t know how to make a personal financial plan. so that you can then check out this review to the end.
Actually, how to make a personal financial plan is easy if you have the willingness to learn and start a few steps below. make sure the information is in accordance with the conditions you currently have so that the results can also be better. without this long time several ways of doing personal financial planning.
How to Make a Personal Financial Plan
As we mentioned on the occasion above we will give you how to make a good and correct personal financial planner. this will certainly be very helpful for all of you who want to have a healthy and planned relationship.
Record Net Income Every Month
The way to make a personal financial plan is to start by recording the entire nominal income received. By recording income, you can calculate the net income received each month.
Of course, this income has been deducted from fixed pay such as taxes, insurance, and so on. The calculation of net salary is done to minimize allocation errors that lead to you failing to save. Recording the net salary calculation is also useful to find out how healthy your financial condition is.
Apply the 3 Post Method
From some Financial experts popularized the method of saving efficiently. The method advises you to divide the salary into three posts with different portions:
- 50 percent of you use to pay for basic needs (debt, installment bills, electricity, monthly groceries, and more)
- 20 percent for long-term savings (investment, insurance, or savings)
- 30 percent for lifestyle (shopping, vacation and entertainment)
Benefits of Having Personal Financial Planning
The methods mentioned above allow you to make good financial planning. But why should you do it. What are the benefits that you can get from doing the personal financial planning.
Of course, many are lazy to do personal financial planning because for some people this seems complicated to do every month. In fact, you will get a lot of benefits.
Create a Spending Budget
You have to calculate how much money you get each month after tax deductions and other salary deductions. Be sure to include only sources of income that you can rely on, such as a fixed salary.
If there is other income that is not fixed, you can put it in another category of income. You also need to make these calculations before the month starts so that you have enough time to complete this planning.
Record All Personal Income and Expenses
If you don’t have personal financial records, you will definitely not be able to manage your finances well. Recording personal income and expenses will provide a lot of benefits to yourself and be the first step of good financial management.
You can see where your income is being used so you can find out what expenses you can reduce and or increase the nominal according to your needs. It will also be very useful for designing goals from finance.
If you have plans to buy a laptop in the next 3 months, then you should start saving money from now on. This can also be used to estimate the money for savings that you have to spend every month so that your goals can be achieved with a predetermined time span.
Pay Debts & Installments On Time
Being free from debt will make you safer and more comfortable with your financial situation, because you will have no other burdens except daily expenses. You also won’t get involved in an endless vicious circle. Debt behavior usually arises because you have needs that your daily income cannot meet.
You could even go into debt to pay the debt will make your debts never run out. In order to be free from debt, you can control the desire to go into debt. If your debt is in the form of a credit card or other loan, be sure to have one without interest.
You can also combine debts in one place so that you don’t get confused. Make sure to always pay quickly so that it is paid off quickly.
Press Consumptive Spending
Reduce the consumptive expenses that you usually do in your daily activities. Because this will make you even more penniless. It is also strictly prohibited by financial planners everywhere.
Using 2 different Accounts
To make it easier for you to save, you should separate the account you use daily with the account used to save. For savings accounts, try not to carry the ATM card daily to prevent sudden withdrawals that make savings used.
Press all consumptive expenses that you have and make sure to only buy the goods you need and at a low price.
Benefits of Personal Financial Planning
The benefits of having a personal financial plan you can find below. If there are six benefits that you can get. These six benefits will certainly be very useful for those of you who have difficulty maintaining your finances. Here are the benefits.
1. Make Yourself More Organized and Disciplined
Being able to manage your own finances means that you can already choose whichever one is your needs and desires. You will become more disciplined when you want to buy something. The consumptive habits you have can also be lost.
Frugal living will make you more orderly because all the things you have planned in detail. Not only basic needs, but other needs, such as vacations you can do.
2. Have Planning for the Future
One of the most important things about managing finances well is that you already have plans in place in the future. When all the plans are well arranged, you don’t have to worry for your future.
If you want to get a comfortable and debt-free retirement, then you can invest and project yourself in advance in the future. If you want to have a house, or get married and others, you can plan it. You have to plan well and do it consistently so that the results are visible.
3. Has Protection From Unexpected Events
Life is a street without certainty, no one will know in the future what will happen to us. Therefore, this makes us need protection against that uncertainty. Managing finances well will make you think about how to choose the protection that suits us, for example, such as insurance or investment.
4. Avoid Debt
If you are extravagant and consumptive, then you will be easier to count. Having debt is an example of poor money management. You must pay off debts in a timely manner and avoid them in the future so that money management can be done even better. You can buy the items you want or look for cheaper but still efficient alternatives.
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5. Reduce Stress
Stress continues to be a thing discovered by those with financial problems. Stressful conditions can certainly cause many diseases to yourself. So you should try as much as possible to avoid stress.
Avoid having large debts, unpaid loans, and a hedonistic lifestyle. Managing good finances will make you free from this and you will be calmer.
6. Clearer Life and Financial Goals
In living their lives, people’s life goals are indeed different, such as getting married, making a business, buying a house, buying a vehicle, and more. Good financial planning will allow you to buy those things.
If you often struggle in finding a purpose in life, you can find it with well-managed finances. You will also be more motivated to do it because it has been adjusted to your financial capabilities.
That’s How to Make a Personal Financial Plan. Doing your financial planning is a step to get out of your problems in the future, because that way we can manage new finances. Hope this review was helpful.