Things You'll Need:
- Paper and pen.
- A plan!
- Vision.
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Step 1
To begin your basic financial plan you must sit down with pen and paper and think about what you want financially in your close future and long term future. Your list is the start, but remember it will change as you think about what you want, what you need and how to get it.
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Step 2
1. What do you want? You need to have enough of an income to sustain you each month, but it would be better to plan for savings in case you must live without an income for 2 months.
So you will need a savings.
For one month you must:
Figure the cost of your rent or mortgage.
Figure the cost of your utilities.
Figure in bills such as car payment, credit cards and insurance.
How much do you spend on food for the month?
Gas for the car?
This is your very basic. Now double it. That is your basic savings for 2 months of survival without a job.
You can live without cable and direct TV. No dinners out, no movies, no golf and no just driving around for entertainment. This is basic living! -
Step 3
Now you must figure a way to get this amount into your savings account. It can be by cutting back on everything you can until the desired amount is reached. Put aside a certain portion of each paycheck from each earning member of the family every time you are paid. Do not flexuate from this plan until you reach the goal.
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Step 4
You job is next. Figure out if you are in a good job and is the company on stable ground. If it seems they are going to close or go out of business that will be the next part of your financial plan.
Update your resume and talk to people. You are not looking to move on to another job if this is a good one. You are looking into the future of other companies and how stable they are.
This is the time to take a class and update your skills or change them. You can take classes at the local college, online or from a mentor. If you are good at self teaching then invest in the books and learn as much as possible. It will only help your future no matter what happens. This will be your best investment. -
Step 5
Is your car in good shape, in need of repair or too expensive to keep? You will have to plan for your transportation and how to solve the problem of a car that cost too much to repair, own or drive. Consider trading a newer expensive car for one that is more economical. Someone may be willing to take over the loan legally and provide you with a good running car that is paid in full, but a little older. Alway take the time to have the older car checked for future problems.
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Step 6
Insurance is next. Do you have insurance? Do you have enough or too much insurance? Sit down with you companies insurance representitives and talk to them about good insurance at reasonable rates.
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Step 7
Family planning. This is not always an option, but you must provide a way to care for everyone and how they face their own financial future. Choose if you want the kids in private school or public school. Another option is home school programs. They are very easy to follow and the parents provide group school for talents in various area's. Your child will not be all alone unless you choose it for them.
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Step 8
Now the basic plan for the future. Are you living in a home you rent or own? If you rent and would like to own a home you will need to make a plan on how to arrive at what you want. If you want a large home you may have to revise your plan to reach that goal one step at a time. You can start with a condo until you build enough credit and time to sale and rebuy the next size up. If you are handy in home repair you can consider a nicer home in need of repair for less money. The money you invest in repairs will be made in time instead of a larger loan.
Set a time table for purchase and the steps to get there.
One year-buy a condo.
Three years-sale the condo and buy a medium size home.
Five years-housing prices are not good. Make a plan of staying until prices rise or increase the size of the current home.
Seven years-sale current and updated home. Invest in property with a standing home with potential for add on's. -
Step 9
Invest your money, but never your emergency savings. Your best investment will be in education for yourself. Next for your spouse.
Consider a retirement plan early in life so you aren't scrambling in the last few years to figure out a way to live.
Medical cost will happen so you may as well accept that now. You can't avoid it. It may be an accident or age, but it will happen! -
Step 10
Plan for emotional up's and down's. Plan for change. Sometimes plan are changed by disaster you never saw coming, but the point is to have a plan. It can and will change. You must plan most for savings, investments, jobs and emotional change. Good luck.
