Stress Free Financial Planning
December 3, 2007
It should not come as a shock to anyone that money is the most prevalent cause of stress in today’s society. The worries over financial issues can invade every aspect of a person life, from their personal relationships to their jobs. It is amazing when you stop and think about the power money has over people, on one hand money can bring a person great joy and while on the other hand money or rather the lack of it, can affect entire families.
By utilizing a few simple rules, you can take steps to ensure that you control your money and not the other way around. Once you let go of the worrisome thoughts over the lack of available funds, you can approach building your wealth with an open mind, and gain power over your finances.
When contemplating your financial situation it is important that you adopt a positive way of thinking. If you begin to think in terms of a positive relationship with money matters then you will find it easier to formulate a real working budget and become more aware of how to attract more prosperity into your life. By no means does this mean a positive attitude is the answer to all of your financial concerns. It is simply a different way to focus your thoughts; this is important because it has been proven scientifically that what we focus on can and will have a direct impact on the neural circuits in our brain. It is certainly not an advantage financially or otherwise to focus an unhealthy attitude towards any venture. Gaining a healthy attitude about your money management skills will increase the opportunities needed in order to help your money grow.
Beyond a positive attitude, a strong commitment is also required if your spending plan is going to succeed. Another requirement for a profitable financial picture is to become financially aware. Simply put, be more alert to the various ways in which money is used in your life.
Once you have examined your attitude towards money, you can then begin to work on a spending plan that will allow you to set obtainable financial goals as well as learn first hand how to become a more effective money manager.
In order to reap an almost instant benefit from your new spending plan, commit to cutting your expense by 15 to 20%. Finding the correct places in your budget is vital to the success of your plan.
Start by tracking all of your expenses. Do not sit and try to guess at what is being spent every month, instead document every cent you spend for a period of one month. This will include all purchases regardless of size or cost.
Once you have tracked your expenses for a month, you can then look at fixed expenses (housing, transportation, etc.) as well as the flexible expenses (entertainment, eating out, etc.). You will be surprised to see just how your money is being spent. You may find that spending $15.00 in the vending machine every month to be a bit much. If you buy lunch every day over the course of one month, you may be shocked to find that you have spent a least $100.00. It is these types of expenditures that you may be able to cut back on.
Next, look at your income for an entire month, naturally your income should be more than your expenses. If for some reason, your expenses are more than your income, then you need to make immediate changes to your financial management techniques. Go back and look at the money tracking data and find ways to make cut backs. Once you have made the appropriate changes in your spending habits you will find money you never knew you had.
Now it is time to begin saving a percentage of your monthly income. The actual dollar amount is not relevant; the action of saving is what is essential. Design a savings plan into your budget and at the each pay period be sure to set that money aside. Commitment is the key to the success for your savings plan.
One last tip for stress free financial planning, arm yourself with financial knowledge. Begin learning how to invest your money; this can take on many forms ranging from antiques to real estate property depending on your particular likes.
At first glance, the prospect of constructing a spending plan that will have a positive effect on you financial future may strike you as drastic or overwhelming. Keeping a positive mind set towards money management, making a commitment to a well thought out spending plan and a willingness to learn will go a long way when it comes to stress reduction in the financial realm.
One final note, remember to reward yourself for a job well done, every so often and treat yourself to a movie or dinner out. After all the purpose of a spending plan is to teach you effective money management skills in order to increase the opportunities for financial growth, not to deprive you of life’s little pleasures.
Posted by andry under Financial Planning |
Great article!
Remember when constructing a financial plan to include life insurance coverage, especially when you’re younger. Although this may seem like something that can be put off until later on, you’ll pay less when applying for life insurance when you are in good health. Make sure you have enough life insurance to cover existing debts, mortgages, etc. in order to prevent leaving someone else to pay your bills.
Comment by Carin — March 3, 2008 @ 10:12 am