The Financial Planning Steps Towards A Better Future

Having a general idea of ​​the financial planning steps will help you understand where you are going and why some steps must necessarily be carried out before others. You have to discipline yourself and focus, not only for the financial area but for all those areas in which you are involved. For this, you have to identify the value of the planning.

The value of planning is summarized instability. When you plan you are in control of the things that are going to happen and that brings you peace, but even more stability because things tend to happen according to what you planned, through good planning, you have the resources to respond to any eventualities that may arise. Therefore, I suggest that you see this whole process based on the reward you will receive in the long term, and that will be financial stability.

Step 1 - Obtain Information and Determine Objectives and Expectations

In this step, you will gather information to create a picture of your individual financial situation or that of your family. You will require information such as bank accounts, bank loans, credit cards, pension contribution accounts, tax returns, investments, insurance policies, wills, service bills, etc.

Once you have all this information you will start dreaming about everything you want and based on those dreams you will set reasonable goals.

Step 2 - Analyze and Evaluate Your Financial Situation

In the second step of financial planning and with your balance sheet, budget, and objectives, you will begin to evaluate your financial situation. In general, you will answer the questions:

Given my current financial situation, can I achieve my dreams? All or just some? Which ones? Why?

What are the factors that would prevent me from achieving my dreams?

Step 3 - Develop Your Financial Plan

When you identify the risks that prevent you from achieving your goals, your plan has established its fundamental bases. In other words, you already know where to focus your efforts. All that remains is to decide where to start and for that, we will use the guide to the financial planning pyramid later.

The general idea is that you go step by step from basic protection through the accumulation of wealth and finally transferring the fruits of your efforts to your loved ones. In other words, from your financial security plan to your financial freedom.

Step 4 - Implement Your Financial Planning

If your planning stays in just a plan, it won't help you. Putting your plan into action requires passion, commitment, and discipline.

At this stage, it is normal that you require the assistance of other professionals (if you have not done so yet) as insurance agents, tax specialists, financial planners, etc. to execute the steps of your plan. After all, you should not try to manage your finances alone but do it as a team to get better results.

The big difference is that when you have a plan or at least an eraser you already know in advance what you want and what you minimally need, so any relationship with another professional arises on your own terms. And believe me, it makes a difference, I assure you.

Step 5 - Monitor Your Financial Plan

Monitoring the fulfillment of your plan and reformulating it is very important because the conditions in which you developed your plan, as well as your life, are constantly changing. What if they give you the news that you're going to be a dad or a mother of triplets when you only expected one?

It is beautiful news and a good reason to multiply everything by three. Therefore, your financial success will also depend on how quickly you adapt to the changes.

The optimum is to monitor your plan monthly, it is advisable to do it every six months but at least you must do it once a year. Readjust your objectives, evaluate if there are new risks and establish new actions according to each situation.

You should also prepare for when things don't go your way. It is impossible for everything to be as we would like, but we should not let that discourage us but to take advantage of all the opportunities that are presented to us every day.

On the other hand, when an unexpected event appears we can deal with it better with our plan under the sleeve and we will be grateful for it. Now that you understand what the financial planning steps are and what needs to be done in each one, you already have a general idea of ​​the financial planning process.