Your Personal Financial Plan
It's not sexy, I know, but having a personal financial plan is imperative if financial abundance is important to you.
I've said it elsewhere on my site but I'll say it again:
If you fail to plan, you plan to fail
You really can't argue with that statement, can you?
Without a personal plan, you're shooting darts in the dark, financially speaking.
Achieving financial abundance or financial freedom is actually a bit boring.
Unless you're set to inherit your fortune, it's going to take a slow, steady plan to get there.
Of course, once you create a financial plan, follow it through for a few years, and then begin to realize the fruits of the plan, there's absolutely nothing boring about the results.
Just be sure you don't fall into the "get-rich-quick" crowd.
Develop your personal financial plan and then just work it.
OK, so I've convinced you that's it's important to create a financial plan in order to achieve financial abundance. What should that personal financial plan include?
Personal Financial Plan
Their wives usually understood that if one of them died prematurely, the surviving spouse and the kids were in for disaster without income replacement in place.
When you create a financial plan, you can't skip this part.
Income replacement is what life insurance is all about. If your family needs your income while you're alive, what in the world makes you think they won't need it if you're dead?
I never could and still can't understand why some people don't grasp this concept.
Since term life insurance is cheaper per thousand than whole life or variable life insurance, term is the way to go here. Multiply your annual income by ten and you'll be pretty close to how much term insurance you need on yourself.
I don't care what it costs to place this life insurance on yourself and your spouse. Get rid of HBO if you must and do the right thing for your spouse and kids. No excuses on this one! Don't be a weeny here.
If your financial planner tries to create a financial plan for you without providing you a plan to eliminate your debt, run the other way.
Your future financial abundance depends on your ability to pay off your consumer debt and then your ability to stay out of debt. Don't fool yourself on this fact.
Your financial planner should spend some time going over your budget and then offer you some ideas and ways to adjust that budget in ways that can free up money that you can then contribute to your retirement, life insurance or debt elimination needs.
What good does it do you to build up a sizeable retirement nest egg only to lose it in a lawsuit? Your financial planner should be able to offer you a legal protection plan so you can set up your will, living will and have access to legal advice whenever you need it.
One of the most popular and affordable legal protection plans is provided by Pre-Paid Legal. Just do a search in Google for them. It's about $25 a month. Affordable for even a college student.
Be sure to get yourself, your spouse and kids covered under a good health insurance plan. Does your job offer coverage? If so, take advantage of it.
If not, find outside coverage. If you're self employed or if your job doesn't offer any health insurance coverage, you may be able to get covered through the National Association for the Self-Employed. Just Google NASE.
Obviously, auto insurance is necessary, but not for the reason you may think. Yes, it's vital if you're involved in a car accident to cover any damages. However, most people don't have enough auto insurance coverage.
Are you currently covered only at your state minimum coverage amounts? If so, why? If you're at fault for a car accident, don't you think you could be sued for an amount much larger than what your minimum coverage is set at?
Seriously consider raising your auto insurance coverage to much higher levels to make sure you're properly covered. Your financial planner should be able to advise the correct amounts based on the amount of your current assets.
If you currently rent, I'm sure you're very aware of the fact that you're throwing away money on rent by not investing in your own home. Your financial planner should be able to offer you a "rent vs own analysis" that shows you clearly the long-term benefits of owning your own home as opposed to continuing to rent.
Once you see the difference of owning, you'll be more motivated to pay off your consumer debt and save toward a down-payment on your first home.
Once your financial planner has you on a plan to get out of debt, he or she should also provide you a plan to stay out. A vital aspect of this idea is to establish an emergency fund.
You can contribute a monthly amount of money into a money market fund until you've built up at least three to six months of income into our emergency fund. Now, when the car breaks down or the washing machine needs replacing, you can use cash instead of going back to racking up credit card debt.
If your financial planner doesn't provide all this for you, it's time to find one who will. Oh, and by the way, demand that they provide this type of financial plan in writing completely free of charge for you. They should earn their income on the services you need within the financial plan, not on selling you the information.
Make them earn their keep by helping you actually enact the plan. Selling you a written personal financial plan that sits in your drawer does no one any good except the person who sold it.
Change your life,