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  Category: Articles » Finance » Article
 

Start Taking the Headaches out of Your Finances with this Do-It-Yourself Financial Plan




By Neil Willner

Actions You Take Today Assure Your Comfortable Future

It’s not really news but - You’ll need money the rest of your life. Hopefully you’ll have all you need. To get there you need to think about how your actions today will influence your future. If you’re like most people, you think about money every day - how to get more - how to keep more and how to have more in the future. Thinking is good but action is needed.

You probably have an action plan for making income, which may be as simple as going to work and doing a good job, all the way to a full and complete business plan. But if you’re like a lot of people, doing financial planning is something that "you’ll get to someday."

Hang onto More of what You Make

So here is your thought for the day: Along with making money, plan for and learn how to keep as much as you can, grow what you have and maximize savings. There are resources to help you do that.

We all know of instances of people who have earned money, sometimes lots of it and then threw it all away. I’m sure you know of a few people like that. These can be tragic stories. Don’t let yourself become one of those stories. Sometimes the tragedy is not dramatic front page news, it’s simply people who have earned money and didn’t put it away.

Financial plan - complicated?
Not really.
Financial = Having to do with finances/money.
Plan = The step-by-step method toward a goal or destination.
A financial plan is a way of setting guideposts for your financial future. You need to know where you’re going. Would it make any sense to decide that you want to go "somewhere" and start driving? Well, it could be fun but you could end up in a swamp! A little planning helps. Make a roadmap. Figure out where you want to go and how to get there financially. That’s what a financial plan is all about.

By the way, putting this off is not good for your financial health! The cost of waiting is expensive to you and your family. Just waiting one year to put money away can cost you thousands down the road. If you wait years you may look back and regret not starting earlier. No regrets! Start today!

Taking the Next Step is Easier than you Think

What‘s the number one thing to do if you do nothing else? Take 10% of your gross income and treat it just like a bill for your phone, mortgage payment or rent. Treat it as something that absolutely must be paid and then put it away.

Here are some basic steps that give you some ideas about putting together your financial plan.

1. Take a look at where you stand today. List all your assets (home value, cash, stocks, retirement accounts etc. in one column and all your liabilities (mortgage, loans, credit card debt etc.) in another column. By taking your total assets minus your liabilities you get your net worth.

2. Check your income vs. outflow. Mark down your family income (net after taxes) plus any income from investments. Compare this to what you spend. Take the difference and that’s what you have left over to invest and save.

3. Write down your financial goals. Include how much income you will want at retirement, money for college education, short term goals such as saving for travel.

4. Managing risk. Make sure that the important things you accumulate in life are covered including the proper homeowners and auto insurance and a personal liability policy. Insure the most important asset that you have - your income - with life insurance and disability insurance

5. Institute a plan. Now that you know what you have and where you want to go, how do you incorporate a plan? This is the point where you should decide whether you want some help or not. There are online programs to help you or you can engage the services of a professional. Here’s a link -http://www.cfp.net/learn/default.asp to the certified financial planner site about how to find a financial planner. We also like www.consolidatedfinancial.com

6. Review your plan. Go over your plan on a regular basis to check your progress and make sure you’re on track.

Delaying Action will Cost You

That’s not so hard, is it? So the idea is to start, do something, begin these steps and then keep working on it. If you want professional advice you can find a financial planner. If you do, get references, read their web site, check with and find out what the fees are in advance.

Two ways to check on a financial planner are through the NASD www.nasd.com (National Association of Securities Dealers) the state insurance department (Go to a search engine and type your state and then insurance department) Why? Because almost all financial planners include securities (mutual funds, stocks etc. and insurance as part of the plan) and one has to licensed to represent these products. On the NASD site you can look up the background of any licensed financial professional including any adverse decisions.

We don’t do "financial planning" but since we’re working with a key part of financial planning (the limiting of risk part) we can give you some ideas on how to get started. We also can help you with the risk planning aspect of this subject which includes getting the right life insurance from www.lifeinsure.com and disability insurance (available from our sister site, www.protectyourincome.com ).

If you take nothing else from this article remember three things:
1. Pay yourself first. Take 10% of your gross income and treat it as a bill and put it in a safe place. Make that place untouchable
2. Protect your assets for your family and yourself with life insurance, disability insurance and the proper liability insurance (home and auto).
3. And begin the first part of a financial plan. Start!
©2005, Intramark Insurance
 
 
About the Author
Neil Willner Intramark Insurance Your online source for life insurance quotes. You can search for the best rates from major life insurance cos. online - on your own http://www.LifeInsure.com and http://www.protectyourincome.com Toll Free 866-691-0100

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