Today is World Financial Planning Day, a global initiative to increase financial literacy, and to teach the value of preparing for tomorrow. A financial plan establishes goals, creates a feasible strategy to reach them, and tracks your progress toward success. Developing a financial plan can help you create a roadmap for your future, no matter what stage of life you’re in or what your goals may be.
Here’s how to build your financial plan in just 5 easy steps:
Set your goals
Think about what you want your life to look like in 5, 10, or 20 years. Do you plan to buy a home, save for your children’s college tuition, or start your own business? Setting inspirational goals will highlight what your money can do for you and make saving feel more intentional.
Create a budget
Knowing what you are spending your money on will give you more control over your finances. When you create a budget, you can understand where you can afford to spend and identify areas you can save.
If you’ve made any big purchases, you may have an outstanding loan or a balance on a credit card. High-interest rates and large monthly payments can prevent you from getting out of debt and saving money. Develop a strategy to pay off those balances and become debt-free.
Save for an emergency
Sometimes life can throw you a curveball, so it’s important to be prepared. By putting money aside, you can make sure a life emergency doesn’t become a disaster. It is recommended that your emergency fund should cover at least 3-6 months’ expenses.
Invest to grow your savings
Investing can help you grow your savings faster, and can be as simple as putting money in a retirement account or college savings fund. With Go & Grow, you can get started with as little as €1 and earn a return of up to 6.75% annually.
And that’s it! What other steps did you take to build your financial plan? Share them in the comments.
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See you next week!