Personal financial planning is a process where you will take control of your finances, this can include learning more about and being more involved in all aspects of your finances such as retirement savings, how to handle credit, tax issues, investments and savings.
You can hire someone to assist you or you can do it yourself with the assistance of a software product. The point is that the more hands on you are, the better your plan will be. Remember, no one will care about your money and your future as much as you do.
There are some simple things you can start doing right away that will help you get a better idea of what your financial situation is and also allow you to make changes so you can accomplish some long term goals such as buying a house, paying for college, or saving for retirement.
Here are a few tactics to keep in mind:
- As with any journey, in order to get to your destination you need to know what your destination is. Are you saving for a house? If so approximately how much do you think you’ll need? How much time do you have to save? Knowing these things will help you figure out exactly how much you have to set aside each month to make it happen. You can do the same thing if you’re saving for your kids college or a new car.
- Once you have a firm goal in mind you may want to enlist the help of a professional planner or your banker. Just be careful before you hire a financial planner since many times they get paid a commission when they buy or sell a stock or other financial product on your behalf. If that is the way they get paid they are more likely to make decisions based not on what is best for you and your long term goals but on how much commission they can make.
It’s best to find a planner that will only charge a flat fee or a per hour fee instead of a commission, that way you know their information is more likely to be unbiased. Also make sure that whatever planner you hire can help you with all your financial needs including stocks and mutual fund investing.
- Sometimes all you need is the assistance of your local bank. They will often have all the products that you will need to help you achieve your long term goals. Just remember that it’s your money and you shouldn’t just hand over the keys to anyone no matter how qualified they may be. Keep informed on everything that your banker is doing and don’t ever be afraid to ask questions, and keep asking them until you get an answer that makes sense and that you understand.
The earlier you get control of your finances the better, though it’s never too late to spend time on personal financial planning. You may be surprised to see that your goals aren’t as impossible or as far off as you may have thought.