The importance of having a financial masterplan

Creating a financial plan can be a great way to challenge your financial goals.

13:34 13 January 2014

Most people do not have clear financial goals and as a result do not have a clear financial plan for accomplishing said goals. It can be hard, especially in these difficult economic times, to sort out everything without having a clear idea of where you want to go.

This is why financial planning is so important, not just for current daily life but also for the future. To get started there are a few things you are going to need to do.

• Start your financial plan by putting together a list of goals. These goals can be anything from retiring early to purchasing a house, to getting out of debt.

 

• Determine what you are going to need to make that goal happen. How much debt do you have? What needs to happen in order for you to accomplish your goal? For example, if you want to get out of debt, your financial plan is going to need to include; the debt amount, what the debt is, and how much the monthly payments are for each debt.

 

• A good financial plan will also consist of what you are going to do to pay more than the minimum amount due on each debt. You will also need to take into consideration the debts that have penalties for early repayment, such as some mortgages.

 

• Then your plan will need to include where the money is going to come from, this might mean cutting expenses or getting a second job.

Creating a financial plan does not have to be difficult but it is an essential tool to making your financial goals a reality. Start now and improvise along the way. Financial planning is important whether you are looking to get out of debt, purchase a home, or retire early.