Below are the tips for Financial Plan
1. Ask why money is important to you.
When his friends would ask him for money advice in those few minutes, “I was giving people prescriptions with no tools to diagnose,” he says. He cites a quote by Stephen Covey, author of “The Seven Habits of Highly Effective People,” who said, “It’s easy to say ‘no!’ when there’s a deeper ‘yes!’ burning inside.”
2. Guess where you want to go.
Knowing where you want to go will enable you to ask for the directions.
No matter what, don’t throw your hands up completely and say that since you can’t predict the future, you won’t make a guess at all. Make a projection, but don’t worry about getting it “right,” he says. If you need to course-correct later on, do so.
3. Know your starting point.
In order to get where you want to go, it’s important to know your net worth — how much you have in assets, and what your liabilities are.
4. Think of budgeting as a tool for awareness.
Often, people base spending decisions on emotional reasons, and then go looking for evidence to support that decision. Instead, he says, we should be more deliberate about our purchases. Budgeting can help to turn around bad spending habits, but it shouldn’t be seen as a punishment.
5. Save as much as you reasonably can.
6. Buy just enough insurance — today.
People make two mistakes with life insurance. First, they put off buying it — either because it doesn’t seem urgent if their health is good or because it involves having a conversation most people would rather avoid. Or, they let fear drive their decision when purchasing life insurance.
7. Remember that paying off debt can be a great investment.
interest part is more than what we take as a debt
8. Invest like a scientist.
Richards has a doctor friend who once said to him, “If I practiced medicine the way I invest, I would have killed half my patients.” Before prescribing anything he’d read peer-reviewed studies to gain confidence he was making the right choice, but with investments, he’d get recommendations from friends and go with gut feelings or by what he heard on the news without doing his own research.
9. Hire a real financial advisor.
When looking for an advisor for financial plan , choose one who is giving you advice, not selling you something, and who is open about conflicts of interest.
10. Behave for a really long time.
Having the plan in the first place will help you stick to your goals. “Investing is one of those cool, rare things where we actually get rewarded for being lazy.”