DIY: Financial Planning

If you are going to engage in DIY financial planning, there are some things that can really help. Financial planning software, such as Quicken, MoneyGuidePro and MasterPlan, can help you determine the different aspects of investing, and private wealth management can help you save. Financial planning involves many different things, and it is important for you to be realistic in what you can do, what the goals are and what you need help with.

The first step in DIY financial planning is to determine what income and funds are coming in, and what is going out in bills and obligations each month. This will allow you to set up a budget, so that you can realistically determine how much money you can set aside or save each month. It is important to note that being able to save any money each month is a step forward. Next, you need to write down the financial goals you have. Make these goals realistic to avoid any pitfalls and frustration. Start small and add on to your goals, as this strategy will be more feasible.

An important part of DIY financial planning is to pay down, and eventually eliminate, debt. At first this can be the most important goal. There are services out there that help you consolidate debt and pay less in interest, until you can get back on track. Some credit cards and other obligations may carry interest rates of fifteen to twenty percent or more. This is money that can be put into financial investments instead, once the debt is paid off. This is why it is important to make payments larger than the minimum, as often much of this amount will go to cover only the interest.

Make sure you have all the insurance you need, in every area. It is also important to start both a retirement plan and an emergency fund. Most experts recommend having an emergency fund large enough to last six months, and at first this task might seem daunting, but by slowly saving up it can be possible. Another good tip is to pay cash, and avoid credit and loans whenever possible. If using your card is unavoidable, try to pay off the amount charged at the end of the month to avoid any interest. Also look for a credit card that offers useful rewards for its use, especially if you are only charging purchases that you can pay off promptly. This way you make your credit card work for you.

Keep your old reliable car, and pay cash when you purchase a vehicle instead of taking out a car loan for the newest model. If a newer car is a must, remember that last year’s model is significantly less expensive and often looks very similar to the latest model. You will see substantial savings and still get a dependable car. Remember to check test crash ratings and other safety features as this can decrease insurance premiums. Finally, with prices of gas rising, plan your trips to avoid wasting time and money.

The information supplied in this article is not to be considered as medical advice and is for educational purposes only.