How To Organize A Financial Plan

Published on Nov 05, 2013 06:00 am

How to Organize a Financial PlanA good financial plan can help you map both where you stand and where you’re going when it comes to your money. To successfully organize a financial plan, you’ll have to include every aspect of your financial life, from establishing strong credit habits to saving for the future. A well-designed, organized plan, combined with a solid credit history, makes future adjustments easier to incorporate.

Collect Financial DataA financial plan can only help you achieve your goals if you use realistic data. Start with an accurate accounting of your current cash flow and any anticipated changes in income or expenses. A comprehensive financial plan will also include any insurance you own, a detailed credit report, and any plans you have in place for the distribution of your assets after you die. By plugging real-life numbers into your financial plan, you can begin to make projections as to whether or not you’ll reach your long-term goals.

Determine GoalsThe data in your financial plan won’t do much good unless you’ve established goals. Your goals determine whether or not your plan is on track. For example, some investors might set a goal to accumulate $1 million by the time they retire, while others might raise the bar to $5 million or more. No matter what the goal, focus on keeping your credit use responsible and paying off outstanding debt. Establishing strong credit habits is important for helping you achieve a number of financial goals, as a strong credit score can open the door to low interest rates, leaving more cash in your pocket and lending you more financial freedom and flexibility in a range of situations.

Make Investment ChoicesOnce you have the basics of spending, saving, and credit use mastered, move on to investing. A multitude of investments are available to help you achieve the goals of your financial plan. Determining your risk tolerance is an important first step. If you’re a cautious investor, you may need to save more aggressively to reach your goals. If you’re more of a risk taker, you’ll have to accept that, while the rewards are potentially higher, the risk of loss is commensurately greater.

Monitor PlanNo matter how well you organize your initial financial plan, things are likely to change in your life. If your income level rises or falls, if you change your goals, or if you become uncomfortable with the amount of risk in your investment portfolio, you’ll have to consider revising your plan. With a well-crafted plan in place, and a strong credit history, you’ll likely only have to tweak some numbers to bring your plan up to date. Reviewing your plan regularly can help keep you on track for the long haul.

This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.

Published by permission from, Inc.  © 2013, Inc.  All rights reserved.

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