Financial Planning 101 – How to Never Be Short of Money
How many times have you looked at your bank statement and balked at the total amount shown at the bottom? Most people don’t realise where they spent so much money and are often left holding their heads in their hands as the end of the month arrives. Financial planning is important if you want to grow and achieve financial independence. Some of the world’s greatest investors, billionaires, and business tycoons have talked about their frugal habits. They don’t spend money on things they don’t need, even though they have no shortage of cash. For instance, Mark Zuckerberg, the founder of Facebook and the world’s youngest billionaire, often comes to work in his Tesla.
If you aren’t making a conscious effort to plan and save your money, you will always find yourself short at the end of the month. If you are tired of asking for money from others or cutting down on your lifestyle until your next paycheque, it might be time to take a long, hard look at yourself and make some changes. Here are some important tips for financial planning that will allow you to exercise greater control over your money.
Invest in a Financial Planning Tool
You need to utilise the power of technology to make your life easier. Invest in a high-quality financial planning software program so that you are able to see where your money’s going. In fact, there are some programs which are equipped with various financial modelling tools as well. These programs can act as your independent financial advisors, showing you detailed analyses of your expenditures and income.
Many financial planning tools are also used by financial advisors to give tips and advice to their clients. You can use the tool to evaluate whether you should make a particular investment or not. The program can help you evaluate different scenarios and determine the best course of action. Some programs can also link directly to your mobile phone through an app. As soon as you make a transaction, you can just record it in the app and the details will be uploaded to the cloud server. Most well-known programs are available on a subscription-based model, so you will have to pay a recurring fee on a monthly or annual basis.
Set Your Limits
Would you consider yourself rich if you are making AUD200,000 and spending AUD180,000 on pointless things? Most people don’t realise where they spent all their money until it’s too late. You need to define your limits and adhere to them. Financial discipline is the most important thing for aspiring millennials, and the sooner you learn it, the better it will be! Try to cut down your expenditures as much as possible and set savings targets. Decide how much money you will spend on food, clothing, and other essentials on a monthly basis. Then, stick firmly to your targets. Within a few months, you will notice a significant improvement in your financial position and your savings account will begin to grow as well.