What is personal finance? It encompasses so many things; your personal expenses, your debt, your retirement plans, your savings, budgeting and many things.
It is but difficult for a majority of us to handle all of these tasks at one time. It is therefore good to have a financial planning made in place to conceive the mechanism of incoming money and outgoing money. Good financial planning can lay foundation for healthier financial situation.
Creating financial statement for you?
The financial planning statement acts as a roadmap to guide you from what you are today to where you could be tomorrow. To measure your financial progress over time, the financial planning and statement act as a benchmark as well as a reference point too. Therefore if you are to create a personal financial planning report, first and foremost step is to have the personal financial statement created.
How? Make categories by segregating monthly bills including utilities, expenses for household maintenance, medical, tuition fees for children loan repayments if any etc and then have a miscellaneous category to measure contingency or sudden unforeseen expenses which include going out to movie with family or luncheon with friends.
Then have the expenses entered on the report, don’t ignore to consider the annual or the quarterly insurance premiums you pay and you may include as monthly expenses (by dividing the premium with number of months). Also do not ignore income you get from various sources which include dividends and annual payouts and have them entered appropriately by dividing with number of months.
Then ascertain debt-income ratio and have it as a ready reckoner. Then prepare the cash-flow analysis which has your income and expenses enlisted by month. This facilitates you in understanding how much money you have in excess or you are in short or you have broke even.
In addition to this determine the risk tolerance capability via risk assessment tools tools and then calculate interest rates you currently are paying for your loans. Then you may shift to the lower or even the lowest rates with a little more effort on studying the financial report. If you want to invest, then take a sneak peek into the future expenses from the report and then make fund allocation.
Creating a personal financial report is no brainer yet financial planning by financial planner is what one can look at. A planner is competent enough to manage many clients accounts at a time and can watch your account grow to a stage where you have excess after you pay for all the taxes, loans and other expenses.
To have a good financial planning in place is vital for successful personal finance planning and wealth management. If you are looking for financial planner team of planners in Sydney, feel free to visit the website http://www.financial-planner.org.au/financial-planning/