HomeEconomic TrendsHow to make a "Financial Plan" from Scratch 

How to make a “Financial Plan” from Scratch 

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Planning is the key to growth and having a solid foundation to start on is a great way to get the financial freedom that you need. It is easy to live paycheck to paycheck, but it is not ideal if you want to achieve adult milestones in life. This is where a “Financial Plan” is helpful.

A house and a car are most people’s dreams and to be able to get them you need to plan in advance. Having a financial plan in place will help you save up for necessary things and also have an “Emergency Fund” in case anything unplanned happens. 

Here is how you can make a “Financial Plan” –  

Evaluate where you are 

You should know what your net worth is and what all the assets and liabilities you have. This will help you understand where you are financially and help you chalk out a plan too. With the assessment done you can then move and make decisions about what would be best for you. 

Round up your bank statements and how much debt you are in.Having a good insight into these figures and analyzing your spending habits. One can then see whether they need to change them or modify them a bit. 

SMART and Realistic Goals 

SMART stands for – Specific, Measurable, Achievable, Relevant, and Time-bound goals that will help you put your money to work. It is the end goal of your investing decisions. Do you want to retire early, or get a big home?  

“Having these goals realized starts by writing them down and then working towards them” 

Budget  

The 50/30/20 rule is excellent for diving your budget. Up to 50% of your salary should be spent on essentials. Then 30% on what you want and 20% of it into savings. If you wish to add more to your savings then, it’ll be more than beneficial to you.  

Emergency Fund 

Unexpected expenses are a part of life, and you should have enough money to cover them when they come up. As and when something shows up you can cover it without any problems.  

An emergency could be anything, your car breaking down, your house needing renovation, or your health not being on your side. A good financial plan will account for an emergency too. 

Pay Your Debts 

If you have loans or credit card debt, then it is of paramount importance that you pay them off. Most times they have high-interest rates. Having these debts out of the way is the first step to financial freedom.  

Assess all your loans too, whether it be student, car, or home, you should work extra hard to get them off your bank balance.  

In the end 

Having a sound financial plan is not, the hard part is the execution of it. It will depend on a number of circumstances, and you should be prepared for all. Your financial plan is “Your” first step to financial freedom make sure you prep well and execute it well too.  

Apoorv Singh Kathait
Apoorv Singh Kathait
Apporv Singh Kathait is a professional writer known for his captivating storytelling and insightful narratives. With a passion for words that spans genres, he weaves tales that resonate deeply with audiences worldwide. Apporv's dedication to his craft is evident in the rich tapestry of emotions and experiences he brings to life on the page. From gripping fiction to thought-provoking essays, his work invites readers to embark on transformative journeys through the power of literature.

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