Who does not dream of going on a great vacation with family or friends? At least I know I enjoy taking a vacation each year. Planning your vacation can take some time to plan.
However, we always seem to find a way to make it happen. We find a way to save enough money, we shop around for the best deals, and we know where we are staying and what we will be doing while on vacation.
But when it comes to our personal finances we seem to forget how to plan. We can spend more time planning our vacation than planning our financial future. Why not apply the same excitement and get it done attitude to financial planning as you do to your vacation plans. Doing this can have just as much impact on your life as a vacation or even a greater impact.
I know planning can be a daunting task. You probably ask yourself: Where do I begin? What’s step one? How can I save more?
It’s easy to get overwhelmed in the beginning, especially when you haven’t planned before.
Here are 10 steps to help you create a financial plan like you were planning your vacation:
Visualize the Perfect Situation
When planning your vacation you have to decide what’s the ideal place for you to visit, activities you want to do, how you plan to travel, and what time of the year you want to travel.
The same as planning your finances. Write down what you would like your financial life to look like. What would it take to get there? What time frame do you have to get there?
Set a Budget
You usually set a budget when planning for your vacation at least I hope you do. Same with your finances, set a budget to manage your monthly expenses. Having a budget is the key to a good financial plan. A well prepared budget enables you to have a clearer picture of your spending.
Decide Where You Want to Go
You have a picture of the perfect place and have set your budget. Now you have to decide where you want to go. By deciding where you are going it sets a goal to work towards. A lot of people talk generally about what they want their finances to look like but never set a specific goal or put a plan in place.
Deciding where you want to go is important as it forces you to set a definite goal. Having goals in place makes it easier to commit to.
Determine Your Time Frame
When vacation planning you usually decide if you’re traveling by car or plane and how long you will be on vacation so you can plan appropriately.
The same can be applied to your financial plan by determining the time frame it will take to reach your financial destination you desire. To help achieve your goals establish long-term and short-term financial goals.
Start Saving Money
Time to start saving! When vacation planning I am sure you save over time to cover the cost of your trip. I try to allocate funds throughout the year to my vacation fund. It makes it easier to save that way.
Same with your personal finances. Establish a saving plan. Having a saving plan in place will provide you with a financial peace of mind. Here are three savings you should consider establishing if you do not have any savings in place:
Future Spending Savings
Automate Your Bills
While you are traveling you don’t want to forget about your bills so automate them. Same is true with your personal finances get rid of your mail, go paperless, and set up online bill payment for your recurring bills to ensure you won’t miss any.
When packing for your trip you try to consolidate as much as you can. The more suit cases you bring adds additional cost and hassle so you consolidate the number you bring with you. You do this by reduce the amount of items you bring with you.
Consider doing the same with your financial accounts. Consolidate your bank accounts, investment, accounts as well as providers. Consolidating will help:
- Reduce the number of statements you receive
- Easier to keep track of your accounts
- Possibly reduce fees
When planning your vacation, you may consider purchasing travel insurance. This will help protection you if something occurs and you have to cancel your vacation. Maybe some occurs while you are traveling travel insurance may help cover some of the cost of this unexpected situation.
Same is true with your personal finances. You want to make sure you have the appropriate amount of insurance coverage. You do not want to be left standing uninsured when a medical, natural disaster, or other financial situation occurs which can place a significant financial burden on you.
Hire professional help
When planning a vacation you may hire a travel agent to help you arrange your travel plans and accommodations. So when preparing your financial plan consider hiring professional advisers to help you reach your financial destination. The ride to your destination will be smoother and quicker if you hire good financial professionals to help you.
Stay Focused and Inspired
The planning process can be long and time consuming but stay focused at the goal at hand. Here are some inspiring stories how other have simplified their finances which will help you:
Use these 10 steps as a guide to help better organize and simplify your personal finances.
But no matter what your financial goals are, these steps will help you stay organized as you begin to put your financial plan in place.
So take action now by applying these simple tips to design your financial future and begin to simplify your personal finances.