The Financial Plan

A financial plan is a blueprint that defines how you will achieve your financial and lifestyle objectives.
What you need to consider when drawing up your families financial plan is applying the fundamental principles of financial planning. Over the longer term this will enable you to achieve your lifestyle objectives.
This is especially true to Survive Recession

To develop a sound financial plan, you need to draw up a budget and identify your financial and lifestyle goals.
Your values are the things that define you or that are most important to you - for example, possessions, status, relationships or the freedom to travel the world. - Know thyself as they say.!

A little trick you can use to figure out what you value is to imagine yourself in the following scenarios:

• You’re financially secure - you have enough money to take care of your needs now and in the future.
  • How would you live your life and what would you do with
    your money?
  • What changes would you make to the way you are living now?
• Your doctor tells you that you have five to 10 years left to live.
  • The good news is that you won’t feel sick.
  • The bad news is that you may die at any time during that period.
  • What would you do in the time you have left?
  • What, if any, changes would you make to your lifestyle?
• Your doctor tells you that you have only one day left to live.
  • Take note of your feelings as you suddenly come face to face
    with your mortality.
  • Ask yourself which of your dreams will be left unfulfilled,
  • What you wish you had done and which projects you wish you
    had completed.

Your answers to these questions will give clues to what you really value.!

When you are developing a framework for your financial plan, you need to recognise that you’ll always live according to your value system.!
You’ve to get your values and your life in order before you can get your finances on track.!

Knowing your current financial status is vital to developing a ‘Short Term Financial Plan’ say for the next 12 months..
Many people have an ‘IDEA’ in their head of their present financial situation and don’t bother to sit down and calculate the reality. Most of us get a huge shock when we find that our ‘IDEA’ is way off the mark..
It’s for this very reason that we don’t do it - we don’t LIKE shocks so most of us ignore the reality.

This has consequences as you’ll imagine and most are not pleasant experiences so we again ignore the real situation. This attitude will bite you in the rear at some stage and will by then have escalated to some level that talking is NOT going to recover the situation..!

It’s not that difficult anyone can do it but pretending that your ‘WANTS’ are your ‘NEEDS’ is going to lead you down a slippery slope and before you know it you’ve spent thousands on rubbish that you never really needed.. Having a ‘Financial Plan’ just makes good sense.!
How to plan.. Well take time out from the couch and sit down with the bills and Bank statement from your last 3 months..

Tabulate them onto a sheet of paper and list the PAYMENTS that you HAVE to pay every month..

Example:
Rent/Mortgage; Car Payments; Loans/leases; Bank fees; School fees; Insurance; Retirement Plan - In fact any amount that cannot be avoided because of contractual agreements.

List items that you need to pay to live the life in your value system.. Such as: Petrol; financial support of relative or friend; Pets; etc

Now List items where you’ve spent money that could have been avoided.

Example:
Restaurants; luxury items; unnecessary clothing; gadgets; credit card expenses etc.

Now itemise your Income: Do they balance.?

If they do you’re spending too much and NOT saving - You’ll NEED to save for your old age when you don’t have a job and living off your SAVINGS.

NO SAVINGS =  No Life.!

Objectives: SAVE up to 6 months worth of monthly expenses so to survive a cash crunch in cases that you are SICK and can’t work or simply lose your Job.. This money to be interest bearing deposits and NOT in the Stock Market.

How much in debt are you.?
Your FIRST priority is to get out of debt.. Especially the high interest type of Debt.. Until you achieve this objective you cannot become reckless and spend money on ‘WANTS’ because your ‘NEEDS’ come first..

I’ve a gift for you It’s a little program that you can use to assist you in creating a budget Click Here.

In addition I’ve put together 9 Books that describe ways to SAVE money and detailed information about how to get out of debt and start leading the life you’ve always wanted. Click Here.!

More Reading Click Titles:

Jobs in a Recession
Risk Tolerance
Emergency Money
The Evolution of Work
Make Money During a Recession