It is a good time to take a small pause and look at how you have done so far in life and what are the steps that are needed to move ahead. Once you have determined that you want to bring your finances under control and have a feeling of abundance, the stage is set in motion for the next step to get the process underway that is to plan your journey.
The most important next step is to create a Financial Plan. It is important to keep it simple and easy to start with and review at various points.
The key aspects of a simple financial plan are:
1. Cash flow Management: try and assess your income and spending patterns over the past few months/years you will need to categorise it into 4 quadrants NECESSITY, LUXURY, IMMEDIATE, DEFERRED. If all your cash expenses can be tagged into any one of these 4 quadrants. Then it is possible to assess the real surplus based on the luxury and deferred quadrants.
2. Assess your current balance sheet of assets, liabilities, life and health insurance covers.
3. Create medium/long term goals for yourself. It could be as simple as planning an overseas holiday to your own retirement plan, and put all these, with the target date and target amount.
4. Now based on the available cash flows in SL 1, prioritise goals and choose the top 1 or, maximum, 2 goals.
5. Set up a review calendar it could be fortnightly, monthly or any other time you feel comfortable but the process of review should not take more than 15-20 minutes.
If points 1 through 5 are diligently followed, you are well on your way to reaching your financial goals.
There is a quote in my GYM which always inspires me to stay disciplined,
“NO PAIN, NO GAIN, SO SHUT UP AND TRAIN”.
This phase is getting your mind ready, to get into some FINANCIAL TRANSFORMATION into
your life, and how you think of expenses, and finally, how you go about succeeding in your
long term goals.
MAKE 2018 YOUR YEAR OF FINANCIAL TRANSFORMATION