Identify personal financial goals
Rather than approaching financial planning as a one-off event, tackle your long-term plan as an ongoing process. Planning can help you to identify your financial goals and create a strategy for achieving these ambitions. The goals that determine your plan will be the driving force behind its successful realisation. From short to long-term projects, every aspect of your plan should be realistic and specific.
Set feasible financial aims
If you plan to purchase a new car, for example, key considerations will include researching your vehicle of choice and how much it’s likely to cost. From saving for a deposit to having sufficient funds for an outright sale, the amount of money you’ll need to accumulate will determine your target purchase date. Knowing how much you need to save and settling on the preferred length of your intended plan will dictate how much money you need to save on a monthly basis.
If your monthly savings goal isn’t realistic, a financial plan will help to identify this error and can be adjusted accordingly to accommodate your budget. Many goals are achievable if afforded the appropriate amount of time. An unattainable timeline can easily be adjusted. Put your completion date back to create a more realistic and achievable plan.
Identify potential for reduced expenditure
“A financial plan will analyse expenditure and create a clearer picture of your cash flow”, advised Michael Liggen of Altavista Property, “It can highlight unnecessary and often surprising levels of expenditure and reveal opportunities to help make savings. Similarly, a long-term financial plan can help you discover new ways to maximise your money.”
Question your risk capacity
Long-term planning can help you to consider potential changes in financial circumstances. From writing a will to the provision of appropriate insurance policies, addressing the very real prospect of changes in personal circumstances can help to avoid financial mistakes such as saddling your family with an unmanageable mortgage payment.
Enable sound financial decision-making
A long-term financial plan can increase an individual’s confidence when it comes to managing their money. Setting individual, periodic goals will help to keep finances healthier and make long-term financial planning more feasible. Planning for your future will instil a sense of discipline and help to keep spending under control.
Measurable goals, such as contributing regular sums of money to either savings accounts or debt repayments will allow you to keep track of your progress. Knowing what needs to be done to achieve financial ambitions makes money management far less daunting.
A long-term, individual plan can help to determine your financial future. Whether you go it alone or employ the services of a professional, your choice will be largely dependent on the amount of investable assets you own and your confidence when it comes to number crunching. Whatever route you decide to take and irrespective of your earnings, a long-term financial plan can make the most of your wealth, both now and in the future.
Featured images: Smart Photo Stock
Michael has been involved in real estate all of his working life and commands a vast knowledge of international markets having visited over 30 countries worldwide with a view to understanding the market and seeing first-hand the products on offer. You can find out more by visiting his social profile twitter, facebook, linkedin and Google Plus.