Are you recently debt-free? A Budget Boot Camp graduate? Congrats! Now it's time to take things to the next level with these personal financial planning tips.
Once you tackle your debt, whip your wallet in shape, and show your budget who's boss, what comes next? SO many Freebs have asked us for personal financial planning tips. While we are definitely not financial professionals, we have learned a thing or two from the school of hard knocks. Here's our first disclaimer: get your budget in order first!
*Note: When you click the links in this post, we may receive a commission at no extra cost to you. We also have a financial relationship with Savology, which we'll discuss later in the post!
With that PSA out of the way, let's dig in, eh? We'll show you how to invest, save for retirement, and more. And don't worry; in true Fun Cheap or Free fashion, we'll teach you how to do it the easy way. No boring presentations, judgmental advice, or overly big (and confusing) words here. Just real talk! Here we go.
WHAT IS A FINANCIAL PLAN? WHO NEEDS ONE?
Let's level-set and dispel a few myths right off the bat. When most people hear the term “personal financial planning,” they envision meeting with men in suits and shelling out big-time bucks for investment advice. Here's the truth:
- You don't have to be wealthy to make a personal financial plan.
- You don't have to spend a dime on personal financial planning.
- It's way easier than you probably think.
A personal financial plan is for everyone! It's just a detailed snapshot of your current financial situation, along with goals for the future and strategies for getting there. So, what can you do right now, today, to get the ball rolling on a DIY financial plan? We'll cover three simple steps!
PERSONAL FINANCIAL PLANNING STEP ONE: DETERMINE WHAT YOU NEED TO INCLUDE IN YOUR PLAN
Personal financial planning is very, well, personal. If you don't customize it to your situation, needs, hopes, and dreams, then there's really no point! So the first step on your financial planning journey is to make a list of all the things you want to plan for in the future. It can be five things, ten things, or one hundred things. You get to call the shots! Here are some ideas to get your wheels turning:
- College for kids
- Saving for a vacation home
- Getting a side hustle going
- Launching a business
- Sending kids to preschool
- Investing in the stock market
- Saving for a medical procedure
- Getting life insurance
- Donating more to causes you care about
The list could go on and on! Think about things you're not yet doing or things you are doing but would like to improve. Jot it all down, and then get ready for step number dos!
STEP TWO: ESTABLISH GOALS FOR EACH PART OF YOUR FINANCIAL PLAN
Okay, now that you've got your list of things to plan for/save for/work on, how are you going to get there? Through the help of some goals, that's how! Set one or two concrete goals for each part of your plan. Here are some quick examples.
Let's say one component of your financial plan is to save up money for a house at the lake. How can you make that happen? Well, you'll need to research the average cost of a home, the downpayment you'll need, etc. Then, give yourself benchmarks to get there once you have an idea of how much money you'll need to make that dream a reality. Ex: add $350 per month to a downpayment savings account.
Not in the market for a second home? Maybe part of your plan is sending your three-year-old to Pre-K next year! Let's say the tuition is $600 per month. How much would you need to set aside between now and then to make Pre-K a reality for your family's budget? Make that your goal! It might look something like this: “Starting next month, we'll set aside $75 from every paycheck to go towards Pre-K next year.”
You could even look into savings accounts that earn interest for these goals, too! You get the idea, right? Set a specific goal for every part of your plan. Next up? Let's talk about staying on track, dabbling in investments, and making the magic happen!
PERSONAL FINANCIAL PLANNING STEP THREE: KEEP TABS OF YOUR GOALS & STAY ON TRACK
Setting goals is the fun part. Dreaming big? That's easy! Holding yourself accountable? Well, it's hard work.
So many people hire financial planners because they need someone to keep them on track and hold their hand. But the good news is that there are a ton of resources available now that help you manage your own financial planning from the comfort of your phone or laptop and on any budget. One of our favorite tools is called Savology.
First of all, the best thing about Savology is that it's 100% free to get started. With their free version, you get a TON of features, including a complete financial plan personalized to your needs and budget. You also get:
- A life insurance review
- Estate plan recommendations
- Retirement planning
- Ongoing financial education
- Personalized action items
- Financial report card
Not too shabby, eh? It's like having your own financial advisor right in your pocket.
Savology also offers a plus plan subscription for only $8 per month (use the code JORDAN and you'll get 20% off a Savology Plus subscription!) which includes live chat with financial experts, a more detailed financial report card, rewards, and the ability to share your account with a spouse or partner. Considering a financial advisor would typically charge $750 per year (or way more), it's a crazy good deal to get all of that for under $100 per year!
The bottom line: Savology can help you stay on track, stretch yourself a little further, and put actions behind your goals. Plans are great, but the magic happens in the execution. So, if you need a little extra push to make things happen, using a tool like Savology could be a game-changer!
LOOKING FOR BUDGETING ADVICE?
If you've never made a financial plan for yourself or your family, we encourage you to do it! But if you need help budgeting or paying off debt first, there's no shame in starting with the basics!
Sounds pretty awesome, right?! Use the code FCFBLOG to get 10% off, just because! 😉
Before you go, check out these must-read posts about saving money!
- Learn how to haggle the classy way and save some big bucks.
- Get up to speed on the 70% rule, aka the best way to save, spend, and invest on ANY budget!
- Find out how to ask for (and get) a discount on just about anything.
Off you go! Happy planning!