financialtreat – will explain about The Importance of Personal Financial Planning that you will get in the following article. Let’s look at this article carefully!
In order for us to have a healthy financial condition we must be able to do personal financial planning well. But there are still many people who still do not know how to do this planning properly and correctly. Here we will give you some tips that you can do to make personal financial planning.
Actually, how to do it is very easy if you follow a few steps below. Be sure to fill in all the information in accordance with the current financial condition you have so that the results can also be better. Don’t fill in with the things you expect to remember happening to your finances. Without further ado, here are some ways to do personal financial planning.
How to Make Personal Financial Planning
As we mentioned above, on this occasion we will give you some ways to make good and correct personal financial planning. This will certainly be very helpful for all of you who want to have a healthy and planned finance.
If you follow all the planning that you have made in accordance with the steps we gave below, then of course you can get a healthy financial condition. Think carefully about what you want to put into this plan. Be sure to fill it properly and correctly.
For more effective planning, it’s a good idea to make it per month. It will become more useful. You will also find it easier to plan finances per month compared to annuals because if it is annual there will certainly be more things to think about. If you want to know how to create a monthly personal financial plan, you can see how below to get the full picture.
1. Create a Monthly Budget
Creating a monthly budget is a very important activity because you can know what expenses you have to spend every month. Sometimes it may be difficult for someone to keep track of expenses per month so that they become wasteful. The existence of expenses per month allows you to register what your expenses are and then see if it exceeds your monthly income or not. Make sure that these expenses become detailed and fixed. Examples can be such as boarding rent and transportation costs.
2. Determine Financial Priorities
Once you have determined your monthly budget, you should determine your financial priorities. The trick is to prioritize to buy the items you need and have run out. This item can be refilled or is a daily necessity. Make sure the maximum amount is also so that you are not wasteful when shopping.
3. Pay Bills Immediately
Don’t think you immediately become rich after you receive a salary. The first thing you have to do is pay all the bills you have. Such as water bills, phones, credits, and other bills that are already in your monthly budget. This is important so that the cost of daily necessities is not disturbed. Be sure to pay on time so that your financial burden can be reduced.
4. Allocate for Savings and Investments
Allocating income to save and investment will make you rich. Because you will have enough savings for what you want to achieve in the future and be protected from poor financial conditions. The funds you set aside can be adjusted to other needs. It would be even better if you set aside a large amount so that your expenses can be reduced.
5. Have Two or More Bank Accounts
Try to have more than one bank account so you can keep money in different places. For example, the first one you use for everyday and the second for saving. A savings account must have a small administration fee and can be accessed without an ATM card. The existence of these two accounts makes you know which funds you can use and which you cannot use unless urgent.
6. Record All Financial Transactions
This most useful way becomes the laziest way many people do as well. To make it easier, there are several applications that record these finances in detail so you don’t have to write in a notebook anymore. This allows you to write your average expenses per month and determine the maximum spending limit.
7. Press Consumptive Expenditure
Reduce consumptive expenses that you usually do in daily activities. Because this will make you even more penniless. It is also strictly prohibited by financial planners everywhere. Press all consumptive expenses that you have and make sure to only buy the goods you need and at a low price.
Benefits of Having Personal Financial Planning
The methods mentioned above allow you to make good financial planning. But why should you do it. What benefits can you get from doing 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. The benefits of having personal financial planning can be found below. If there are six benefits 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 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. Living frugally will make you more orderly because everything you have planned in detail. Not only basic needs, but other needs, such as vacation you can do.
2. Have a Plan for the Future
One of the most important things about managing your finances well is that you already have a plan for the future. When all the plans are well organized, you don’t have to worry about your future.
If you want to get a comfortable, debt-free retirement, then you can invest and project yourself first in the future. If you want to have a house, or get married and others, you can plan it. You have to plan it well and do it consistently so that the results are visible.
3. Have Protection From Unexpected Events
Life is a road 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 protection that is suitable for us, such as insurance or investments.
4. Avoid Debt
If you are wasteful 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 better. You can buy the items you want or look for cheaper but still efficient alternatives.
5. Reduce Stress
Stress continues to be a thing discovered by those with financial problems. Stress conditions can certainly cause many diseases to yourself. So you should try your best to avoid stress. Avoid having large debts, unpaid loans, and a hedon lifestyle. Managing good finances will make you free from it and you will become calmer.
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6. Life and Finance Goals Are Clearer
In living his life, the purpose of life per person is 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 have difficulty 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 ability.
Those are some ways and also the benefits that you can find from managing finances well. Doing personal financial planning is not an easy thing, especially for those who have just done it aka beginners or can be called newbies. There must be a lot of confusion and laziness that hits when you want to try to do it the first time.
But you don’t worry about this. The more often you do personal financial planning and once you feel the benefits, this will certainly be a monthly activity that you cannot leave behind. Try to do personal financial planning first and feel the benefits that will be very great felt to your life. Hope it helps!