Exit 1- The Financial Plan

First stop on our financial trip, acknowledging your situation. The key to any financial plan is to recognize your faults and what you want to establish. I'm going to show you in a easy 3 step process how to gain financial stability.

Step 1: Gathering Info
Gathering all upcoming, outstanding, or future bills is the first step. Once you have all of your information it is time to decide what bills are necessary and what can be eliminated for the time being. Financial statements covering that past year will be helpful in assisting you.

 
 
 















Step 2: Creating a Plan
This step is very crucial in your financial journey. It is important to establish your short-term and long term- goals as to what you hope to gain from this. There are many ways you can create a plan, but one of my personal favorites is the "envelope" system. This works well for people who aren't the best with managing money or balancing a checkbook.

• The first thing you will do is take all of the information you have gathered and create a "list" of your bills.
• You will then create an envelope for each bill with the amount and date it is due written clearly on the front of it.
• Each week or 2 depending on your pay period you will take your check and disperse it into the envelopes
• You will also create a "Misc." envelope for remaining funds.
• Depending on your funds you will choose to keep the money for emergency, create a savings, or have extra spending money.

* Another helpful method for those with multiple outstanding loans is to combine them all into one: eliminating multiple bills and interest rates.

Step 3: The Follow Up
This would be the most important step to any financial plan. It is crucial that you stick with your plan and make it something that you will abide to. Following up each month ensures that you are on the right path and achieving your desired goals. If you find yourself drifting from your initial plan or coming up with negative results you will then go back to step 1 and start again.


I will be uploading post's each week for budgeting tips and financial tools. Please feel free to comment with any questions or suggestions for upcoming posts.


                                                                                                           Lindsey Lillard
                                                                                                           Central Bank
                                                                                                           Finance Major