A Personal financial plan is needed not in order to spend less and save endlessly, but in order to get more for the same money. We tell how a personal financial plan will help you go on vacation, make repairs or buy a new car.
Step 1. Where to start?
First, you need to translate dreams and abstract desires into the format of specific goals, and then soberly assess their value. For example, your family is expecting a baby and you are thinking about a new family car. So far this is just a dream. How to make it a goal?
- Determine the most important characteristics of the desired car: engine efficiency, luggage capacity, the spaciousness of the cabin, and so on.
- Examine the models on the market and select a few suitable ones.
- Analyze car dealership offers. Trade-in or soft loan programs can significantly reduce costs.
- Suppose it turns out that you do not have enough 200,000 rubles to buy the car of your dreams. And you will need it in six months when the baby is born.
So, this is no longer a dream, but a specific goal: to save 200,000 rubles for six months to buy a car . In the same way you need to do with other dreams – to formulate goals from them.
Step 2. Assign goals by urgency and importance
Usually you want everything at once. For example, in addition to the car, you dream of an apartment in which there will be a separate room for the child. The home theater would look good in the living room. And in the summer it would be nice to go to the sea. When you clearly prioritize, it may turn out that it is better to postpone the vacation in the fall, when the packages get cheaper. The child will not need his own room until he is three years old, so you have time to save up for the down payment on the mortgage. But the cinema, it may turn out, is not really what you need.
So you get a list of goals with priorities, deadlines and the necessary amounts.
Step 3. Evaluate your budget
- Analyze income and expenses and calculate how much money you can save per month.
- Calculate how much you need to save so that you can collect for your goal by the planned date. To do this, divide the amount that you need to accumulate by the number of months remaining until date X.
- Compare the two numbers that you received. So you will understand if you have enough money.
For example, for a car, you need 200 thousand rubles in six months, which means you need to save about 33 thousand a month. On vacation, you usually spend 80 thousand, you will need them after 8 months – this is another 10 thousand per month. In the same way, you need to evaluate all goals.
Step 4. Consider different financing options
It is likely that your available funds will not be enough for all important purposes. Then it makes sense to turn to alternative options: loans and borrowings.
Before you take a loan, carefully study all the conditions: interest on the loan, the cost of servicing it, insurance that may be required from you.
In any case, you need to distribute your income so that there is enough money for current expenses and for achieving the goal (accumulation or payment of a loan). Economists recommend adhering to the principle that loans should not be paid more than 30% of income.
It is worth thinking about other ways to quickly achieve your goal. This can be paid overtime or cost optimization. Suppose you have a morning ritual – on the way to work, buy a takeaway latte for 250 rubles. If you multiply the cost of coffee by the number of working days in a year, it turns out that for the year you spend 62,500 rubles on a cute ritual. This, for example, a trip to the sea, which you drank on the go.
After that, adjust your plan: take into account future payments on loans, additional income, and reduced expenses.
Step 5. Let the money grow by itself
If there is still time before the goal, it is better to save yourself using suitable financial instruments. Choose them based on profitability, risk and timing.
For example, federal loan bonds are a reliable and especially profitable tool if you invest in it for at least three years. A bank deposit carries practically no risks thanks to the deposit insurance system and can be done for a shorter period.
The main thing is not to keep money in the box, so you will lose part of the real value of your savings due to inflation.
By investing, you will receive additional income – and it also needs to be reflected financially.
To draw up a sensible financial plan, you need:
- To formulate financial goals – honestly and clearly, in monetary terms and with specific terms.
- Separate them according to their importance – do not spare time for this, so as not to stay with the TV in the winter, but without warm boots.
- Find the best ways to solve them – consider all options, even the most unrealistic ones, at first glance.
- Keep track of income and expenses – be aware of your financial condition.
One more piece of advice: before planning a purchase and adding it to the plan, consider a few days if you really need it.
And most importantly, follow the personal financial plan
Making a personal financial plan is only half the battle. The most difficult thing is to stick to it in a disciplined manner. Every day, many temptations lie in wait for us, but emotional, impulsive purchases only delay our dreams.
It is necessary to fit into the plan for each item of expenditure. Determine how much money is spent per month on food, travel or a car, payment for utilities and other mandatory monthly expenses, and strictly adhere to the established limits.
If it does not work out (especially often this happens at first, until a habit has developed) – the plan needs to be adjusted. You can redistribute spending, you can try to earn more. The main thing is to keep within the budget and resist the temptation to “climb into the piggy bank.” Otherwise, your financial goal will be indefinitely delayed.
All expenses and incomes should be fixed and the plan should be consulted daily. This will help keep abreast of your financial situation. For convenience, you can use the services of financial planning.