Many people find the idea of financial planning to be intimidating. It can come off as complex and confusing. However, it may be easier than you think.
The basic idea of financial planning is to follow a road map from where you are to where you want to be. You want to start by analyzing your current position. What resources and assets do you already have? What liabilities are you responsible for? How much cash flow do you currently have? Is it enough to help you reach your goals?
You also want to examine your ratios. Are you saving enough money or paying off too much debt? Will your current rate of savings and income be enough to send your kid to college a few years down the line? Maybe you want to retire when you’re 50, are you setting yourself up to do so?
Next, how quickly do you need to get there, and how many speed bumps are you willing to hit? You may want to invest in low-risk companies to ensure slow but steady growth, or maybe you need money quickly, even if this means a few financial hiccups.
Your financial future is important, and you should be planning according to your future goals. The video above provides more detail into how you can better plan your finances