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Step 1
Identify your financial Strengths. What things are you doing well with respect to your finances? Focus on the things you can control that highlight the positive aspects of your financial situation. These items have a favorable impact on your overall financial health. You may be saving for retirement, maximizing your tax deductions or have a home based business that supplements your current income. List all the items that contribute to your financial strength.
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Step 2
Analyze the Weaknesses in your current financial situation. These are the areas within your control that could use some fine tuning. Maybe you have too much credit card debt or just too much debt period. Maybe you don't have an emergency fund for those unplanned major events. Write down all the areas that detract from your overall financial success.
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Step 3
OpportunitiesLook for Opportunities that can change your financial status. These are external things that you can take advantage of to help your financial situation. Does your employer offer matching 401k contributions? Is there training available that can update your skills and put you in line for a pay increase? Maybe there's an organization that provides financial help and information that could be of benefit to you.
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Step 4
Determine the Threats that can potentially derail you on your way to financial freedom. These are things that are out of your control, but could put your financial plan at risk. Credit card companies could reduce your credit limit. That's one example. A higher than expected rent increase might be another example. These threats need to be mitigated to reduce their impact on your plan.
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Step 5
Financial Planning via SWOTPut the analysis to use. Now that you have all the Strengths, Weaknesses, Opportunities and Threats listed, you can take action to secure your financial future. The idea is to brainstorm on building more strengths and exploiting the available opportunities. By doing so, you can come up with contingency plans to eliminate / deal with threats to your finances. You can overcome the weaknesses that are holding you back. An example would be taking advantage of the training opportunity to get an increase in pay. Then you could apply that extra money to reduce the credit card debt weakness.
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Step 6
Give it a try. Take an hour one day and try the process. The results will not be as obvious as you may think. The mere fact that you write all of these items down gets your brain working to try and solve the problems. Jump start your wealth building and get on the road to achieving financial freedom through this simple exercise.














Comments
Flybyknight said
on 4/21/2009 Great article. First time I've heard of the SWOT method. 5* rated
MrBB said
on 4/17/2009 This is worth looking into. Good article.
budgetmom said
on 4/12/2009 Excellent article and great advice. I have never heard of the SWOT method before but it makes a lot of sense. 5 stars.
joshtb86 said
on 4/7/2009 awesome, thanks a lot, 5*!
PhiMcRee said
on 4/7/2009 Interesting read. Real world advice. 5