| This article illustrates the steps to | | | | either in a cabinet, accordion file, a box, |
| do-it-yourself financial planning. Included | | | | any way that works for you. Now locate and |
| are the seven fundamental steps, resources | | | | file all of your tax returns, receipts, |
| and tools that you will need to get the job | | | | insurance policies, contracts, wills, |
| done right. | | | | mortgages, deeds, titles, pay stubs, employee |
| | | | benefit statements, banking (loan, savings |
| You are in control | | | | and checking), bills, investment and |
| | | | retirement plan statements and any other |
| You are already your own financial planner. | | | | important papers. |
| Regardless of the extent of help you receive | | | | |
| from professionals, you ultimately are the | | | | Step 4: Manage Cash Flow |
| decision maker and you are responsible for | | | | |
| your own finances. Although the financial | | | | Your household is a business. You need to |
| world has become increasingly complex, it is | | | | know how much you are earning and spending |
| becoming easier today to do a lot of your own | | | | each month. Balance your checkbook and |
| planning. The variety of resources has | | | | establish a budget. There are dozens of books |
| expanded such as software for money | | | | and software to help with this, and your |
| management and planning; online tools for | | | | bank's website may provide this as well. This |
| banking, financial planning and investing, | | | | will help you know when and where you are |
| and resources, and books and blogs that are | | | | overspending. |
| easy to understand. These resources may be | | | | |
| good news for you if the cost of professional | | | | Step 5: Self Educate |
| fee only financial planners is out-of-reach | | | | |
| to you. Besides the cost of fees, others may | | | | Establish a sound foundational knowledge base |
| avoid planners because they have heard | | | | about financial matters. Start with books |
| stories of advisors trying to sell a product | | | | about budgeting and money savings tips, debt, |
| that didn't fit their situation. Cost savings | | | | basic insurance and investing. Be sure to |
| and avoiding product pitches are excellent | | | | include reading about mutual funds and |
| benefits of being your own planner. | | | | financial planning. Avoid get-rich-quick, |
| | | | real estate, gold or innovative 'secrets' |
| Everyone should take a more active role in | | | | books. Stick to the fundamentals. I find the |
| their financial affairs. Not only does it | | | | "For Dummies, 'For Idiots' and 'D-Mystified' |
| help with educated decision making and fraud | | | | book series to be very helpful for many |
| avoidance it also helps you better | | | | people. Lastly, stay informed about current |
| communicate with your other professional | | | | financial topics by reading financial |
| advisors such as your accountant and | | | | magazines, newspapers, the business section |
| attorney. You will also find yourself | | | | of papers, and blogs. |
| spotting opportunities when they cross your | | | | |
| path. | | | | Step 6: Create a Written Plan |
| | | | |
| Becoming a better manager of your family's | | | | A written plan serves as a road map towards |
| finances will also help you 'dig out' if you | | | | your financial destination. It helps you |
| are struggling financially. When you consider | | | | understand where you are presently and the |
| the low savings rates and the high household | | | | steps that you need to take to move forward. |
| debt, many more people find themselves in | | | | A financial plan is a process. As your life |
| this category today. | | | | changes with income changes or the birth of a |
| | | | child, your plan should be updated to reflect |
| The following are 7 steps to do-it-yourself | | | | your new circumstances. You should revisit |
| financial planning: | | | | your financial plan at least once a year to |
| | | | make any updates or to include items in your |
| Step 1: Commit | | | | checklist for completion. If you write your |
| | | | own financial plan, you will have to obtain |
| The first step to financial planning always | | | | financial planning software. Your other |
| begins with commitment. Whether you are | | | | options are to pay to have a written |
| having financial difficulty, or have just | | | | financial plan completed by a fee financial |
| avoided setting goals and mapping out a plan | | | | planner or by an institution or professional |
| - commitment is the first step. Commitment | | | | that provides products. Be sure to find out |
| provides the discipline and focus needed to | | | | about how the planner is compensated and what |
| help sustain you on the path towards your | | | | your fees will be. |
| goals. | | | | |
| | | | Step 7: Engage Professionals |
| Step 2: Set Goals | | | | |
| | | | Most people can't entirely do all of their |
| Without specific goals and a plan to achieve | | | | financial planning by themselves. Assemble a |
| them financial success stays a foggy dream. | | | | team of trusted professional advisors that |
| Therefore the second step is to list the | | | | you can rely on to help you implement |
| dreams that will motivate you. Write down all | | | | different aspects of your plan, answer your |
| of the goals you want to achieve in the short | | | | questions and be on the lookout for you. The |
| and long term. This will serve as the driver, | | | | professionals that can be the most |
| or the fire in the engine giving you the | | | | advantageous are a proactive tax accountant |
| motivation to move forward. Everyone has | | | | and financial advisor with extensive |
| dreams, but without constant watering and | | | | planning, investment and insurance knowledge, |
| attention dreams will go dormant. Leave your | | | | an attorney qualified in estate planning, and |
| past mistakes and inaction behind you, light | | | | a banker that can help with credit ratings |
| a new fire and chart a course forward. You | | | | and debt management. Before committing to |
| have an enormous amount of potential and | | | | anyone, get referrals for trusted |
| talent, and if you have made mistakes you now | | | | professionals from people whose opinion you |
| have more experience and wisdom. Dare to | | | | respect and don't be afraid to ask |
| imagine what you could achieve - because your | | | | challenging questions. |
| best years are ahead of you. | | | | |
| | | | There you have it, the seven keys to |
| Step 3: Assemble and Organize Information | | | | do-it-yourself financial planning. Start the |
| | | | process today: the sooner you do, the closer |
| Get your stuff together. Planning is easier | | | | you will be achieving your goals and living |
| if you assemble everything in one central | | | | with less financial stress. |
| location. Make an organized filing system | | | | |