Personal financial plan: features of compilation, recommendations and example

This article will explain how to draw up a personal financial plan. It affects income, and people who don’t plan their money notice how they “leak away”. In this case, a person can neither invest nor save for something worthwhile. Those who control their funds can afford everything.

What is financial planning?

Financial planning begins with the fact that you need to know your starting point. That is, you need to understand point A where you are. It is impossible to guess, guess or take it from the mind, it needs to be determined only in one way - to find out your numbers, that is, how much money and where you spend.

If you draw up a personal financial plan, you cannot plan it without knowing what you have. It does not matter for what purpose you save up: a car, an apartment or a trip - you need to organize everything and keep records.

Drawing up a personal financial plan

To keep money you will need to compile 2 tables. You can keep a personal financial plan in Excel or any other program or draw a spreadsheet on a wide sheet of paper.

The first table will include your expenses. It needs to be divided into several columns. You can write in it every day or write down the number of salaries for each month (below is a sample table where the expenses are calculated on the first day of each month), enter the categories of your expenses in the neighboring columns. You can’t fit all the costs into a common “heap”, because if you consider the total cost, it will not give you anything. If you take specific categories, for example, how much you spent on a cafe, on gifts and on clothes, this will help to understand whether you are moving in the right direction or not.

Therefore, take the main categories (for example, home care, taxes, car maintenance, food, clothing, medicine, entertainment, children, tuition fees and so on) and write them in the table. The last category will be Miscellaneous. This table may be slightly adjusted from month to month, perhaps some items you will remove or add.

Cost accounting

Having drawn up the table, begin daily or monthly to write down the amount of money spent in one or another category. For example, the personal financial plan drawn up below includes only 4 categories, which are a simple illustrative example. By the end of the month you will be surprised at the picture you’ve got and will understand where the money goes, why you don’t have enough for anything and you cannot save a certain amount to achieve a financial goal.

At the end of the month, you need to record the total amount spent for each category. Analyze it, understand whether adequate amounts go to different needs. Next, you need to record the total expense for a month or a year.

Revenue accounting

Next, you need to create exactly the same table as with the expenses where you will record your income. Your task is to fix the profit, as your personal financial plan will come from this table.

You also create a table, write the date in the column. If income does not come to you every day, then write down the numbers after the fact. In the neighboring columns, write down the sources of income, for example, scholarship, alimony, salary, part-time job, freelance and so on. Write down the amounts that come to you. At the end of the month, you need to calculate the total amount of your income.

Comparison

Next, you need to compare your spending with income. If the remaining funds exceeded the expense, then you have a certain amount. Further, the implementation of a personal financial plan as a tool to achieve your goal continues. Looking ahead, you should outline all your financial goals for the current year and allocate the remaining amount. You need to understand if this money is enough to achieve the goal.

If this amount is not enough, then you will return to the first table. You need to optimize your costs. Look at your list of expenses: maybe something can be reduced or removed without harming yourself? In no case do not limit yourself to food, relaxation and entertainment, just try to find more favorable options for you. The personal instruction is not attached to the personal financial plan. Everything needs to be composed and edited individually, for yourself. Accordingly, if you reduce costs, then the number of remaining money rises to achieve the goal.

Optimization

If you have optimized all your expenses and have already lived so optimally that you have nowhere else to go, there is only one option left - an increase in your income.

The requirements for a personal financial plan are simple: you need to get more than spend. Believe me, it happens and vice versa. You can increase your income by increasing efficiency or by searching for an additional source of income:

1. Increased efficiency. This item requires self-organization and accounting of their time. Plan your day, get rid of external irritants, if your rate depends on the amount of work done. Try to do more than usual, but do not overdo it.
2. Search for extra income. You can find a job on freelance, take extra paid hours at work, or look for jobs elsewhere on weekends and free time, if you have the strength and desire to do so.

Sample personal financial plan

The table below is an example of a freelancer. Such expenses as a doctor, gifts, and so on are not taken as a basis, but you must include them. An example of a personal financial plan in Excel is easier to make, but you can use special paid or free programs.

Total amount: 269990.

Income plan

It has already been said above how to draw up a personal financial plan for your expenses. Now we give an example of the income of the same freelancer, who spends 270 thousand rubles a year:

Total amount: 575,900 rubles.

Achieving a financial goal

As you can see, our freelancer has 305 thousand rubles left. If he wants an apartment for 1.2 million rubles, he needs only 4 years to achieve his financial goal. A personal financial plan helps not only monitor your income, but also significantly optimize it.

Realization of your goals

Once you decide to make a better situation with your money, your first step should be to sit down and make a list of financial goals that you would like to achieve. Browse and expand your list until you are convinced that these are the goals that you really want to get.

Then make clear plans to achieve your financial goals. Break these plans into concrete feasible steps that will allow you to achieve your monetary goals, and you are already on the right track.

In the next step, you should identify some priorities. You will probably have a lot of money, but you will not be able to focus on all your financial goals right away. You might want to work on some fast ones first to gain momentum. You can focus on one big money goal if it presents a problem that dominates your life (for example, getting a job or getting out of credit card debt).

How fast you want to do something, no matter how small your income, you have to start. You will never achieve financial goals without any real effort.

If your goals are clear and your action plan is defined, you know exactly what you need to do. The most important thing is to start. Each of these steps is crucial, so don't skip them. Together they guarantee you monetary success.

Way to success

Most people who decide to take responsibility for their financial independence take a leap and make some real progress at the beginning of the journey. Over time, unfortunately, stagnation begins. We have so many interests in life that it is very easy to distract from our financial goals. We set ourselves the tasks. We are taking some steps to achieve our financial goals. And we are delighted with our initial success. But soon we find a lesson elsewhere and little attention is paid to what, frankly, should be a priority. We focus on other activities and just don’t think about plans.

And when we stop thinking about them, we begin to put them off. Then the things that we really have to do, we just don’t want to do! It does not make sense. But it's true.

It is true that most of the actual work that we need to do to achieve our financial goals is boring at best. You may be looking forward to work of any kind without enthusiasm, but you will feel some satisfaction at having done it!

A second accepted practice is described in Brian Tracy's big book, entitled "Eat a Frog." The title of the book and its idea follow from the answer to the question: “What is the best way to eat a frog?” Answer: "Fast."

The most important idea is to optimize those tasks that really need to be done, or they will hang over your head until you do it. Perform them quickly and first.

This principle applies to most of life, but financially it means that you do not pay bills or anything else, put it off just because you are afraid of it. It is amazing what pressure the fulfillment of these tasks relieves from your mind and what gives joy. It’s worth repeating to yourself: “Eat this frog. Eat this frog. Eat this frog. ” Then move on to the task you want to complete, and just do it. Consider taking one financial step at or near the top of your list and getting what you want from the start. If you do this, your financial success will be almost guaranteed, because your daily achievements will stimulate unshakable motivation for continuing actions.

Motivation

Suppose, for example, that you want to save 3,000 rubles per month or add an additional 3,000 per month to pay by credit card. Instead of including exactly this amount, give yourself a range, say, from 2500 to 3200 rubles per month. According to Maura Scott, associate professor of marketing at Florida State University, having a range is more motivating because we perceive it as achievable and difficult. There are two psychological forces underlying our motivation to adhere to a long-term goal. The more difficult it is to achieve the goal, the more we will be rewarded with a sense of satisfaction if we succeed. But it is also more likely that we will fail and be disappointed.

But this is the beauty. “If it’s too easy, it doesn’t look like a goal, but at the same time, the goal should be set within the limits of human capabilities,” Scott says. Even if you have reached a low threshold, you will still reach your goal and you will not feel And if you work harder to get to the top of your goals range, you’ll get a greater sense of accomplishment.

This is what works in real life. Now you know how to implement a personal financial plan. Set out a list of financial goals with written plans for achieving them. Write down a list of important tasks every day, including what you intend to do on that day to increase your finances. Then make a clear commitment to do what is on your priority list in order of importance and take action immediately, even if it means you have to “eat this frog”!