Personal Financial Planning

Saving money isn’t something that comes naturally to everyone. In fact it’s not uncommon for people to only begin seriously saving money in their late twenties or early thirties… or sometimes much later. What’s more, it’s easy to spend money here and there on frivolous things, without realizing just how much it’s adding up in expenses – that is, until you actually take a look at your bank statement.

Deciding to sit down and construct a personal financial plan for both the short and long term is an excellent idea. Here are some easy steps to get yourself on your way to better saving and spending habits.

Guess where you want to go

I say “guess”, because nothing is laid out in stone. You’re most likely not where you thought you’d be ten years ago, and you’re equally unlikely to be exactly where you think you’ll be in 10 or 20 years from now. That’s perfectly normal. The point is, picking a direction (even a vague one) is going to get you a lot further in the choppy waters of life than just floating there without any direction at all. Better still, keeping your goals somewhat vague will keep them rife with possibilities, allow you to take more risks, and also minimize the impact of potential setbacks.

In, say, 10 years, do you want to be the head of your own self-created company? Do you want a house, a partner, and a child on the way? Figure out a basic goal that you would like to accomplish.

Pick a starting point

That means, determine your net worth by evaluating your assets and liabilities. One of the hardest parts about this step is that it can reveal things about ourselves and our spending habits that we probably don’t want to face up to. Increases in debt, terrible credit, failed ventures that ended up costing thousands of dollars…


That’s life. No one’s perfect.

The point is to know where you’re at, and move forward from there. Otherwise you’ll just stagnate.

Save as much as possible

That means saving as much as reason and your circumstances allow. Don’t dwell on questions like, “Am I saving up enough money for my child’s education?” or, “Will there be exactly enough money needed for my retirement?” This only creates more stress. Right now, you don’t have enough. And you probably won’t have enough any time soon. That’s why you’re developing a personal financial plan. The point is, by saving up as much as you reasonably can right now, and sticking to that mindset, the numbers will add up over time, until finally you’ll begin to realize that you do have enough.

Consider working with a professional financial planner

You might be thinking what has been outlined above is somewhat vague. That’s because everyone’s financial situation and goals are different. A personal financial planner, however, will be able to work with you specifically in accordance with your unique financial situation, help you establish goals, and work towards them.