How I Plan My Financial Goals

keep it simple, always

Photo by Firmbee.com on Unsplash

I never took finance very seriously. Never tracked my transactions. Never had any budget. Bought whatever I could get. Ate a lot of eat-outs during my early 20s.

the result?

Even though I was earning good money from my online business, still I never had enough.

Earning $5k per month and expense is around $3k. Will you call this smart planning?

Absolutely no!

I know so many people who are in the situation I once was.

The biggest problem is I used to think that I could make this amount of money forever. When you make around $10k per month.. what do you think? You think you have conquered the whole world because now you will be making that much amount forever!

this FOREVER was my problem.

I don’t have the energy I used to.

I may have become smarter than my 20s but I don’t have the same passion and energy I used to. I know many of you who are in their 30s can relate to this.

We are not the same anymore. So making the same amount of money forever is … never going to happen.

We all too want to retire someday. We don’t want to work FOREVER!

My Grandpa’s Advice On — Retiring Rich

What is a financial plan?

For me, financial planning is simply having a big clear picture of what my current finances are and what my future financial goals should be. What strategies do I need to take to achieve my goals?

For example, if I need to make an extra $1k per month. What measures should I take?

I could use this money for —

1. Traveling
2. Retirement savings
3. Emergency funds
4. Home/Car EMI

so on.

But the question is how to make that extra money.

1. Maybe work more so that I can get a raise
2. Or maybe start a new side hustle which will not only make me an extra $1k per month

financial planning includes your cash flow, savings, debt, investments, insurance, and any other elements of your financial life.

Your financial goals should be —

1. Measurable — For this it is necessary that I should track my finances. And this I have been doing for 6 months now and the results have been quite amazing.
2. Realistic — Simply because it should make sense, right? For me, realistic doesn’t mean having a small or easy goal. I try my best to plan my goals before making the first move!
3. Written down — I have started writing my finance goals. I use sticky notes for that. Place it somewhere close to your working desk. I have a mine on the wall right behind my working table.
4. Reviewed often — I may not be perfect the first time I set my goals. I keep on improving with time. I review those goals once a month so I can remember my WHY and stay focused!
5. On a Budget — Now I have a budget. And I have seen remarkable changes in how I am handling my hard-earned money. I would recommend the same. Simply use a plan page for tracking finances or you can also for a Google Sheet like this one. No coding is needed!

9 steps in financial planning

1. Set financial goals — I like to think about my money goals in an inspiring way. I ask myself: How do I see my life in 5 years? What about in 10 or 20 years? Do I dream of having a car or a house? Do I want to be free of debt? Maybe pay off my student loans? Will I have kids? And how do I picture my life when I retire?
2. Track your money — I like to get a sense of my monthly cash flow — what’s coming in and what’s going out. For this, I follow the 50/30/20 rule. I use 50% of my earnings for things I need like rent, bills, and transport. Then, 30% goes to things I want like eating out and fun stuff. The last 20% should be saved or used to pay off debts.
3. Budget for emergencies — This I consider the foundation of any financial planning. I would advise keeping some money away for some emergency funds. No need to set big goals here. You can start small. $500 per month seems to be sufficient. And adjust accordingly.
4. Tackle high-interest debt — I would recommend paying down high-interest debt, such as credit card balances, payday loans, title loans, and rent-to-own payments.
5. Plan for retirement — I have seen many building some side hustles that can pay off after retirement. For some, it can be savings and so on.
6. Invest to build your future goals — I invest in Stocks but only a little. I am still not very sure nor I am an expert. So I am going slow on this. You can choose any type of investment you want. I do this under the guidance of my brothers.
7. Estate planning: Protect your financial well-being — This is what my Grandfather taught my dad. Both were really good with the real estate business. My both grandfather was good in this business.

Why I Started Budgeting and You Should Too

Conclusion

I am not a finance expert. But handling money is one of the most important skills that everyone should learn.

If you are thinking of the other skills that it’s cooking.. :)

I don’t expect you to become a financial manager or something. but you should know where your hard-earned money is going.

Whether it’s going in the unwanted stuff? The its time to track down your finances and see where you are going wrong.

Doesn’t matter whether you are asking $100 per month or $10,000 per month.

Just believe in a budget. Plan your finances safely.

Your bank account will thank me later!

See you soon!

If you are interested then this is a link to the sheet — Ultimate Budget Tracker.

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