Credit Appraisals

Financial Planning: How To Keep Your Financial Plan On Track

Financial Planning – It’s one of those phrases you hear from your TV all day long. People go see someone who is a “financial planner” and then they end up swimming in Belize of chasing their grandchildren down a beach.

For the rest of us, financial planning might mean the difference between not having outrageous medical bills and being able to go to dinner when it’s not the early bird special. It can mean being comfortable or being in our seventies greeting people at Walmart.

Here is an introduction to financial planning and how you can get started on some steps yourself.


Oh, how we all hate that word. A budget is like a diet; everyone says their own, but it never seems to be working.

A budget is a plan for how you’re going to spend your money.

Your budget needs to be several things:

●      Written down – If it’s not on paper where you can see it, it’ll slip away in a few days.

●      Realistic – Don’t over-protect your earnings or under-project your spending. You’re not going to be able to go a whole month with just one delivery pizza. If you don’t budget realistically, you’ll find yourself thinking about your budget and you won’t succeed.

●      Reasonable – Don’t go crazy. If you’ve never invested in an IRA, don’t start out thinking you’re going to be able to or even should drop $100,000 in your account. Start slow.

●      Start where you are – Know exactly what you owe, what you have in savings and checking, and how much you expect to make.

The next thing to make sure you do is to have some savings put away. You’ll want to have at least six months of money so that you can pay your bills and eat in the event you can’t work.

Once you’ve made your budget and started your savings, you’ll hopefully have some surplus. That’s the money that should go into your retirement so it’s there for you for later.

Cutting Costs

Maybe you can’t live without any delivery pizzas in a month, but you don’t need two per week. Start looking at places where you can reduce expenses. Here is a list of places to start looking:

●      Restaurant food – It’s easy and convenient, but it’s also expensive. Get your take-out food and dining out under control.

●      Alcohol & Tobacco – You won’t see these on a lot of lists, but they are expensive indulgences. Consider that if you smoke a pack a day at $7 a pack, you’re spending about $2555 a year just on cigarettes. Quit smoking and keep the drinking to a minimum. Also, if you’d like a beer, have one at home where it costs $1, versus a bar where it’s $4 or more.

●      Digital subscriptions – These are insidious little buggers. You subscribe to a service and then forget that you’ve done it. Every TV subscription is about $10 a month, so if you have 10 of them, you’re paying $100 a month for programming. Look at all your subscriptions and see what you can live without.

Consider everything you spend money on in a month and make sure that you’re eliminating everything that’s not necessary right now.


The problem with debt is that you’re paying someone else for the privilege of being in debt. Every credit card, your student loans, back taxes, everything is costing you money to borrow.

Getting out of debt is part of your plan. Here’s a plan for getting your debt under control:

  1. Gather statements from your creditors or just write down what you owe. You’re going to need to know what you owe and how much your interest is.
  2. Arrange them by the highest interest rate to the lowest interest rate.
  3. Next, sort the highest interest rates into the smallest amount to largest amount.

So if you have two credit cards are 29% and you owe $100 on one $1000 on the other, start paying off the lowest amount first. Make the minimum plus $5 on the larger one for now. Get rid of the smaller debt fast.

Also, pay more than the minimum on every debt. Even if it’s just $10 more, you’ll start getting your debts under control quickly.


As you start to see the light at the end of the tunnel, it’s time to talk to a financial planner. This is a professional who can help you to stash your money so it’s there when you’re ready to stop working.

Even if you only have $100 a month left over, it’s worth getting someone to turn it into more money through investments.


As you start to have more money, consider getting insurance to cover the empire you’re building. Homeowner’s insurance, renter’s insurance, and life insurance can seem like a luxury, but as you accumulate a life’s worth of accomplishments, you’re going to want to protect them.

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