Creating a Personal Financial Life Plan

No matter what the circumstances or the time of life, it is never too late to develop a financial life plan. While the ideal situation is to begin formulating the basics of the plan while still pursuing studies, even someone who is nearing retirement can engage in this process. Getting started is simply a matter of deciding what needs to be included.

Start With the Basics

Before trying to get into anything too involved, it pays to take a financial inventory and use it as the starting point for the creation of the plan. This involves compiling two lists. The first list will focus on any assets that are either already cash assets, or that could be converted into cash if the need arose. Those assets can be in the form of money in bank accounts, income from part time or full time employment, any shares of stock on hand, life insurance, or even artwork that has been appraised.

The second list will include any current or pending obligations that must be managed out of the available cash. This can include household expenses like a mortgage or rental payment, utility costs, credit card debt, and any outstanding secured or unsecured loans.

By creating these lists, it is possible to fully understand exactly how things stand this very minute. That is important, since that understanding provides the springboard for developing the first details of the financial plan.

Setting Goals

Based on the data collected for the two lists, it is now possible to begin setting a series of goals. Make these goals as specific as possible, and include a plan for reaching each one. For example, it is not enough to set a goal of paying off your credit cards over the next 24 months. Instead, create a specific plan that involves organising those debts into a logical sequence and allocating a certain amount of money to each debt during that time. The process should include refraining from creating additional debt and re-allocating funds to the next card on the list as the previous account is settled in full.

Getting into the swing of setting goals and developing a specific plan of action to achieve each one may seem a little difficult at first. Seeking help from planners like Hennelly Finance will help bring some order to the process, and make it all the easier to set realistic goals that the client can reach.

Planning for the Future

A personal financial life plan is not just about eliminating debt. It is also about building wealth that will pave the way for a comfortable retirement. Gone are the days when it is possible to rely solely on the pension provided by an employer. The most prudent step is to explore options for personal retirement accounts that generate consistent returns.

Work with Hennelly Finance to identify the best personal retirement account option and contribute the minimum required for the year. When next year arrives, take a second look. Are some debts now retired and those funds available to increase fund contributions? Perhaps there has been an increase in pay. Always devote a portion of those year to year increases in income to the retirement fund. Building this into the plan makes it all the easier to forget about that money and allow it to begin building a viable nest egg.

Working with professionals like those at Hennelly Finance makes it easier to identify a starting point, set goals, and know how to go about achieving them. With commitment and hard work, financial stability can be achieved.