Financial Planning 101 by Avida Land's "My Path to Financial Freedom" Manual
I've always believed that if you want to achieve something big in the future, you better start working for it in the present. Same principle should be carried out to our financial planning. Admittedly, I started thinking about and taking this seriously not too long ago. It was in 2012 when I took the first step. I wish I had started sooner, but it's better to have started than not to do something at all.
Last month, I received a present from Avida Land to guide me in meeting my financial goals. If you're a newbie to financial planning, this manual will definitely help you jumpstart your future towards financial freedom!
You need tools such as Avida Land's "My Path to Financial Freedom" manual to keep you relaxed in financial planning, which could appear complicated and intimidating to most people. The manual is compilation of informational content, fun graphics to go easy on the eyes, and engaging activities or worksheets to really help you get down on your knees and actualize your financial planning.
First thing's first, one has to know his financial standing. How? By knowing these two important things:
- Statement of Cash Flow
- Statement of Assets and Liabilities
Moving on, now that we know our financial standing by doing these activities, we could assess if we're spending too much, if we're saving too little, if we need to get another job or look for another source of income, if we are too indebted, and if we have enough savings or emergency fund. By knowing our financial condition, we could start financial planning better because we have a realistic baseline.
Sabi nga ni Ka Benjamin Franklin, "If you fail to plan, you are planning to fail." So, on our roads to financial freedom, careful planning should jumpstart it, and the timing is NOW. But just like any other plans, your plan should be S.M.A.R.T.:
- Specific - list down what you really want to achieve or save for. There are no right or wrong answers here. Is it a car, a house, a cruise, an educational plan, a X amount of money? List it down.
- Measurable - List down the cost of these dreams so you know how much you would need or save for.
- Attainable - Based on your SALN and your plans to save more to build your future around it, assess your specific dreams if they are attainable with the current financial condition you are in.
- Relevant - Are your dreams and plans in line with your core values? Know the whys of your plans and if they sound relevant to the life that you have right now or wish to achieve in the future, then go for it.
- Time-bound - A goal without a deadline will not push or pressure you into achieving or reaching for it. Consider this as a project which you need to launch timely otherwise, it's like planning to fail.
- Mutual Funds
- Stocks (through a broker because I'm no expert and I have to time to bantay)
- Study your cash flow. Be aware of your current financial condition so you now where you stand, your starting point and aim a more realistic destination.
- Spend less than what you earn.
- Have discipline. Create a habit of saving and investment by paying yourself first (savings or investment) before your bills.
- Protect yourself. Build an emergency fund and get insured as well. Better to have critical illnesses covered.
- Choose investments wisely. It's important to know how much risk you are willing to take to know which investment is workable for you.
- Leverage. Pay off debts and clear your credit line, you'll need this in the future when you have to make a loan for let's say a business or for one of your listed dreams/goals.
- Be Smart. Invest only in what you understand. It pays to read a lot, talk to financial experts, and equip yourself with tools to help you get started.