Financial action plans: The full breakdown
A financial action plan directs you on how to manage your money in order to make progress toward your specific goals. Simply knowing what you want will not get you there: You need a real plan to make it happen.
Video Transcript
- Financial planning simply means setting a number of goals and writing steps to achieve them with your money. You can start with just a few and make a living, breathing, flexible plan for yourself. Your plan can be as simple as writing down three to five goals and some steps for achieving them. It's different from a budget and covers more than just how you'll spend your money.
No two financial action plans are the same. They differ based on how complex your needs are and how much of your life plans you want to cover. As long as you make your goals specific enough to be measurable and you set specific actions down in writing, you have a working financial plan.
As you succeed at your own plan over time and update it, you can expand it to include more complex goals, like a retirement plan and investments. For these, the services of a professional planner may be helpful. Professionally written financial plans typically encompass all areas of a person's life. So that means debt management, investing, retirement planning, estate planning, financial forecasting, insurance, risk management, assets and liabilities, and net worth. And then plan for periodic review.
If you want to write a plan but you need help, there is an abundance of help out there just waiting to be tapped. A whole industry of professionals, associations, software, and apps exist just for you. If you haven't done so yet, take some time now to get your plan started. Stay financially fit, friends.
