Derek Siewert - Steps in Personal Finance

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Steps in Personal Finance

• Derek Siewert

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• Everyone want to be ensured of their future
  especially in the aspect of finance. Money and
  liquidity is very important to live a decent and
  normal life today. Personal finance allows anyone
  to experience a good life in the present and at
  the same time prepares the future in terms of
  financial planning. Personal finance involve
  principles, theories, and practices in finance in
  making decision pertaining to one's finances.

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• There are at least five key steps in personal
  finance. Since personal finance is akin to
  financial planning, the goals and objectives as
  well as the actual practice of personal financial
  planning is very dynamic. An example of the
  aspect which financial planning covers is the
  retirement plan. Retirement, as many observes, is
  a moving target.

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• First, one should assess his or her financial
  condition. This involves computing the monthly
  income, expenses, and possible savings. It also
  includes the assessment of the values of movable
  and immovable properties taking into
  consideration their appraisal and depreciation.
  This part focuses on the present.

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• Second, goals must be set and determined. Based
  on the present financial condition, a person must
  come up with an attainable goal for which he or
  she will have to work on financially. This step
  focuses on the future. It calls the person to
  picture out himself or herself in the future
  living one's chosen lifestyle.

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• Third, a proper, comprehensive, and doable plan
  must be made. This provides for the particular
  acts and changes one has to undergo to ensure
  that the goals will be realized. This part calls
  for a serious commitment because at this point,
  one might realize that he or she has to cut
  spending to save more money and work harder to
  increase one's salary. This pertains to changes
  in lifestyle and spending habits.

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• Fourth, a strong will and determination to
  execute the plan must be had. No matter how
  perfect a plan, achievable the goals, and
  complete the needed resources to attain the
  objectives of personal finance, it the person
  does not have the will, courage, and
  determination to execute the plan, everything
  will still go to waste.

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• Fifth, regular monitoring and assessment are
  important to ensure one remains on the right path
  of achieving the goals of financial planning.
  Possible adjustments and changes must be made
  along the course of execution to remedy any
  defect or to avail of the opportunity to hasten
  the achievement of the goals and objectives of
  financial planning.