How to properly create your personal financial plan

In order to manage your money wisely, you need to clearly know your goal, and also have a ready-made financial plan. The latter is a document where all your assets are collected in one place, the tasks you have set, as well as ways to achieve them are outlined.

It is necessary to correctly assess your financial capabilities, properly control your money, make serious purchases and not count every penny.

At the same time, it is very important to draw up a plan on paper, and not in your head, she emphasizes. Otherwise it will not be possible to implement it. Moreover, this plan can be drawn up for any period – a month, a year, five or ten years.

Step 1: Calculate your income

This means all the money coming into the family, even the grandmother’s pension and the son’s scholarship. In addition to regular income, such as salary, you need to understand what assets you have (investments, deposits, real estate) and what income they bring.

Step 2: Calculate your expenses

Step 3: Compare income and expenses

This way you will understand your financial capabilities, what goals are available to you, how much you can save per month, and also where you are losing money, the expert says. This will allow you to see trends. For example, if you spend the same amount of money on taxis per month as on groceries, you might want to use public transport more often.

Step 4: Cut Unnecessary Spending

By lowering your expenses, you can also figure out how much you’re willing to save each month without sacrificing your quality of life.