Make a Financial Plan with These 4 Steps


Getting your finances in order can change your life. You won’t have to constantly worry about whether you will have enough money to cover your bills or whether you are making the right decisions about how much to save and how to save it. You’ll know how much you have to spend on everything, and you can feel confident that your future will be financially secure as well. If you don’t know where to begin, the tips below can help.

financial planning

Your Goals

The first thing you should do is figure out your goals. Do you want to pay off your debt, or do you want to save more money toward retirement or for the down payment on a home? Do you want to manage your budget better so that you don’t run out of money before you get paid every couple of weeks? Write down your goals somewhere that you can check regularly. If you aren’t sure what your goals are, as you work through the rest of the steps below, they will become clear to you.

Have a Budget

You can’t do anything until you know how much you are spending relative to what is coming in and whether you can cut back in some places if necessary. Get an app to help you in this if you don’t want to write down everything that you spend. Few of your expenses are truly fixed. If your rent is too high, you can always look into moving or getting a roommate. If you’re paying too much for utilities in winter, try turning down the thermostat and putting on a sweater.

Of course, you might actually find over the course of tracking your spending and putting a budget together that you can cut yourself some slack and be a little more extravagant. This step will probably take a few months because you need to track your spending for a while to get a realistic picture of your expenses. During that time, think back on your goals and whether you would make changes to any of them now that you understand your spending habits a little more.

Get Out of Debt

Getting out of debt is one of the best things you can do to ensure financial security and freedom. If you carry credit card balances or other high-interest debt, you can take out a personal loan at a lower interest rate to pay off those debts. You’ll start reaping the benefits right away with lower-interest payments and less money spent on those debts over the long run.


You need to think about saving money in several different ways. First, you need an emergency savings fund of at least a few thousand dollars in an easily liquidated account. Next, you need to be putting money away toward retirement, ideally in an employer sponsored plan although there are alternatives if you are a freelancer or contractor or your employer does not offer this. You might also be saving toward something specific, such as a vacation or your child’s college education. Finally, you may want to invest. You can choose among options that offer varying degrees of security and returns based on your age, goals and risk tolerance.

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Make a Financial Plan with These 4 Steps
Getting your finances in order can change your life.
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