Financial planning has become more and more common in today’s society. It is imperative to have a practical financial plan for a family so that realistic money management goal can be set. Below are some of the simple steps of a common financial plan.Determine your financial goals
Before you begin to draft your financial plan for yourself and your family, the first thing that you need to do is to determine your financial goals. Examples of measurable financial goals are as follow:- To have a $50,000 education fund in ten years’ time for children
- To have a $20,000 down payment for a bungalow in five years’ time
- To have a $10,000 travelling fund for overseas trips in two year’s timeEvaluate your current net worth
This is another important step of a financial plan. Before you start setting any goals, you must take stock of what you have before you begin setting any financial goals. Knowing what you have give you an indication how much more money is required in order to achieve your ultimate goals. A lot of people have ignored this important step and therefore it makes setting a realistic goal difficult.Target date to achieve your goals
After you have set your goals, it is vital to set a deadline to accomplish those goals. Without deadlines, there will not be pressure to achieve it.Execution
Lastly, you must take the necessary actions to achieve the set goals within the stipulated period of time.The above are basically the four important steps of preparing a written financial plan either for yourself or for your family. It can also be applied to other similar plans that require determination of goals and evaluation of net assets.