Creating your own five-year financial plan can mean a lot of different things for you and your future. Each person has individual financial goals that they set for themselves, but often times these are set well into the future or in the immediate coming months. If you want to change things around for yourself within the next five years, then you have to have a plan set in place in order to make it really happen.
Even if you don't know where to get started, there are steps you can take towards setting small goals that make a big impact on where you are in the next five years. This is the perfect amount of time because it's not so far into your future that you will be retiring, but it could be long enough to allow you to accomplish a lot of different things. So, if you get started now you will be one step towards securing your financial future which is becoming more and more important in todays world.
1. Assess Your Current Finances
Too many people are unrealistic about their finances at any point in time. If you aren't completely aware of what is going on with your money right now, then you need to take an assessment. Take into account what your monthly expenses are, how much you make and what you are saving. You should also take into account how much debts you have and how long you have to pay them off.
Although looking at your current expenses is important, you should also look at long-term expenses. This means keeping an eye on investments and loans that you will have to pay off over the next five years. Opening your eyes to these things is important and will keep you aware of what is going on with your money.
2. Make Your Goals
After you've seen what your financial situation is like, you will need to start setting those goals! Start with some things that you want to change about your finances. This could be that you want to pay off your student loans, but it could also be something like wanting to save a certain amount of money. Remember that you need to be specific with the goals that you set so you will know when you reach them. Specific goals will also motivate you more than those that are vague.
If you are having a difficult time figuring out where you should be in the next five years, then go and meet with a financial planner. They will be able to provide you with a lot of specific advice about your particular situation and what you can benefit from the most. Their expertise is going to help you out a lot and will really make a difference with the goals that you set, so take the time to meet with them!
Tip: Don't make your financial goals unreasonable, or else you could end up not meeting them. Set realistic expectations for yourself and what you know you can accomplish, even if it's hard work.
3. Get Life Insurance
The last step to take is to get life insurance for yourself and your family. This will protect your finances in the event that you or your spouse passes away. This is a cushion that is important to have, as you never know what will happen and you always want your family to be well taken care of.
Your goals are yours alone and your financial plan does not have to mirror one that someone else has. Remember to keep your best interests in mind when creating your plan and to meet with a professional if you need some help.
Article inspired by iSelect.