Look at the financial goals as your lights on the car when you drive during the night. You need the lights to see where you drive on the road, the same way as you need your financial goals as alight for your financial road. How to do your 5 year personal financial plan?
Even though life is not all about money, financial freedom is also a part of your life puzzle. Quality of life and a life worth living is about balance in 4 areas of life. Health, wealth, education and relationships.
You have your financial goals for the near future of the coming months, the same way as you need your distance lights, meaning your long-term financial goals.
The first step is about setting your financial goals up and then planning the actionable steps that you need to take to get the results you want.
How to Do Your 5 Year Personal Financial Plan?
Make an exact plan.
Do you want to become a millionaire?
Or do you just want to increase your monthly earnings up to Eur 4,000, 5,000 or 10,000/per month? (See now: Digital iPad Budget)
Depending on the actual amount you want, you have to write it down. Let’s write it down specifically.
5 Year Personal Financial Plan towards your bright future
Even though after the initial 5 years, you will reorganize and plan further, let’s look at your first 5 years personal financial plan as a longer-term plan you have.
Especially when it comes to purchasing assets, starting a family or starting a business.
- Write down your life goals
- Determine what your life goals will cost
- Get over your fears
- Track your progress as you work towards your 5-year financial plan
- Immerse yourself in things to help you succeed and search for resources
- Journal to reflect on your progress and reward yourself even for a small success
Write Down Your Goals
The long-term goals are your visions for the future. There are few large purchases you will make during your lifetime and so preparing for this and having a long-term plan is inevitable.
Since only then you can see your positive results.
With setting up long-term goals, you also state your age limits for accomplishing these goals, which may help you on the way and be your motivation for your daily business or daily job you do.
By setting the age, you are giving yourself time limits and so you can better organize the effectiveness of steps you are implementing in life.
Determine What Your Goals Will Cost
However, the goals need to be realistic and specific, attainable, measurable, relevant and within the set time limits. By setting your time limits, you will get help with your procrastination and perfectionism.
Literally, if you want to buy a house that costs $350,000 then the question is how will you get to this point to have money to buy it?
The long-term goals however don’t end there. The purchase is only the first step. Then you obviously want to live in the house and you will need to maintain it.
That’s why you need to have specific goals and evaluate your financial progress as you go.
”Only buy things that you can afford otherwise soon you will sell the things you need.” Warren Buffett
Also read: 7 WEALTH-BUILDING HABITS FOR RICH LIFESTYLE FOR A LIFETIME
Let’s get inspired by some great long-term goals in life
- Buying a property and creating your home, whether it is a house or apartment.
- Paying off any loans as soon as possible. If this is not related to you, great! Good job for not getting into debt. Not using credit cards is the best strategy if you want to build your wealth and financial stability faster.
- Buy my next better-quality car with cash
- Set up your retirement portfolio. If you start at an earlier age, you have a longer time period for accumulation of interest and even the principal amount which you will pay into the retirement fund. However, if you haven’t started in your 20s, start as soon as you finish reading of this book.
- Build up and reach your financial net worth of the first $1 million by the age of ………… (You can complete it for yourself)
- Write a book, whether it will be about sharing your personal knowledge as an educational book or you write your memoir. If you obtain knowledge, you should share it and pass it on to the next generation.
- Set up and keep running a profitable online or physical business. In the year 2022 we live in a digital era. Apart from having opportunities to set up physical businesses and shops, the internet brought us an opportunity to create an online content creation business. (Watch here now: How to Make Passive Income)
Get Over Your Fears
Life is not only about fears. Get over it. You need to take actionable steps. Since your money will not earn by itself (at least not at first).
Money makes money. But you first need to earn them and then invest them well into an asset or shares of companies so they appreciate in value.
If you want to buy a house, have a family, start an online blogging business and accumulate wealth, being healthy you need to take appropriate steps. You will feel scared and have doubts about what if it doesn’t work.
If you want to be happy, you can’t be crying and keep yourself depressed. That’s not a strategy for a happy life that works.
If you want to keep a healthy lifestyle, it is not only about going to the gym but also about keeping healthy. You don’t need a strict diet for a week that you will not be able to follow and after a few days you go back to eating and put on even more weight.
You can’t just get a mortgage and expect that it will pay itself. And once you own a house, you still have the maintenance fees.
It is primarily about your needs such as shelter, food and clothes, car and internet and phone.
We all have financial wants and needs. When you start with the creation of the 5-year financial plan, make sure that you plan for the needs first. (See now: Printable budget)
However, once you cover your needs get further into wants. Since life is also about enjoying a bit of luxury in life too. Keep the balance all the time.
Track your progress as you work toward your 5-year financial plan
To be able to track your progress, you need to have written goals, otherwise, you can’t review them back. Write down these goals for success and well-being and see whether you are on the right way.
When it comes to tracking, it is important to cherish and take care of your financial goals, however, don’t over-force them.
Checking progress on a daily basis, especially if your goals are set for a 5 year period will cause you to stress about not seeing results that early.
If your plan is to start a blogging business, focus on the creation of useful content rather than just watching your analytics.
If you have a monthly salary of $2,000 and you want to increase it by attending a course and finding a better-paid job, then this will not happen overnight.
There is no overnight success. You can breathe now and continue working on your goals.
Also read: HOW TO SET GOALS TO DESIGN YOUR GREATEST LIFE
Immerse yourself in things to help you succeed and search for resources
If you want to improve your health, search for healthier recipes. If you want to increase ownership of assets that will increase your financial well-being, then you need the asset and cash to obtain it in the first place.
When you want to build 2 or 3 streams of income, such as a blogging business, youtube channel and investment portfolio let’s say, setting up all these income streams will make your decision about the niche and platform and then set it up.
Further, you will need to keep working on it. Your Youtube channel will not generate money and increase your financial well-being if you post only one video.
Remember that you have your 5-year financial plan because you want to increase your financial stability and reach financial freedom.
Journal to reflect on your progress and reward yourself even for a small success
This journaling is of a personal character since you will need to support yourself emotionally on the way. It is about dedication and about enjoying these little successes. Otherwise, you will not have ”the wind in your sailboat”.
Congratulate yourself. Because nobody else will know what effort you have put into building your financial freedom and achieving your financial goals, only you will know.
Well done. Great job.
Making your 5-Year Budget Plan for financial success
You can make your 5-year budget plan with the digital financial planner that will help you to include your values and manage the financial rules and amounts that you will actually put into your budget.
Applying the rule of 50%-30%-20% meaning that:
- 50% of your income goes into spending on all your needs
- 30% for your wants
- while you always keep your 20% towards your future and savings, will create well-being and a well-deserved financial balance in your life.
You can do it. It is actually very easy to do. It starts with your decision and then just every month continue putting money on the side.
Here I have for you this Ultimate Financial budget planner which includes all necessary digital pages from values, financial goals, and net personal statements to the actual monthly budget.
Conclusion
Have you started your 5-year personal financial plan yet? Maybe some of these ideas will help you on your way.
Remember to keep your goals balanced on all levels such as health, wealth and finance, education, and relationships. Spend quality time with loved ones. You are well and safe even when you take a risk.
Since progress happens only when you consider possibilities and take the right steps. Then you literally minimize risks.
INCREASE YOUR FINANCIAL LITERACY:
See also now:Planners for life and finance
If interested in reading about more streams of income,CLICK HEREfor your book How to Make Passive Income Online: 7 Proven Streams to Improve Your Financial Situation.
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