Financial planning is the process of taking control of your money. It includes setting financial goals, budgeting, saving, keeping your credit report clean, and investing. If you are in your twenties and are already starting to take control of your finances then you are ahead of most people. Learning about personal finance early means you will achieve your goals sooner and have time to make more goals. In this article I will give you tips on financial planning in your twenties.
PERSONAL FINANCIAL GOALS
The first step in financial planning is setting goals you would like to achieve. Write your goals down somewhere and look at them whenever you need a little motivation. Writing your goals will help you to keep going because you will have something to look forward to. Some goals you should consider are: creating an emergency fund, start to save monthly, start a budget, improve your credit, or pay off debt.
START A BUDGET
It is impossible to plan for financial success without having a budget. Without a budget it is hard to know how much money is coming in and going out each month. Once you start a budget and see where your money is going each month you will be more successful when it comes to saving your money. Below I will give you a couple easy ways to start your budget today!
* DIY Budget Workbook – Begin to carry a notebook around with you where you go. In the notebook write down every amount of income you make and every amount of expenses you have for a whole month. The notebook will help you see exactly where your money is going and how it is coming in. This option might be hard to stick with but if you do it for a month you will have a much better understanding of your finances.
* Mint – Mint is a website that offers free personal finance software, http://www.mint.com . This site will help you start a budget by collecting all of your bank, credit card, and loan accounts to see your spending habits. Mint will also keep you on top of your accounts by reminding you of due dates and account balances. The only problem with mint is that to get the most out of it you would need to start using your check or debit card for all of your purchases.
The best thing you can do to be successful in your personal planning is to start to save early. Starting to save, even if it is a little bit each month, in your twenties will put you ahead in life. The first step to saving is to open a high yield savings account which you can link to your checking account. Starting early will let you acquire interest in your savings account. When you start saving you should immediately set up an emergency fund that you will not touch unless it is really an emergency.
MAINTAIN GOOD CREDIT
If you are unsure about where you stand when it comes to your credit you need to go to http://www.annualcreditreport.com and get a free copy of your credit report.