|Is money running your
By Anne Chun, C.A., CFP
When the alarm clock gives you your wakeup call, and you get ready for yet another hectic day in your life, do you sometimes feel that money is running your life? Do you sometimes feel that money is running your life? If you have a choice, would you rather stay home with your young children, or live a leisure life? Have you tried to do something about this wish? Here's something to try for the New Year or at anytime in the year when you have the "money blues".
Financial planning is about your life and your money: setting priorities, making choices and having control. It's not about how much your make, but how much you keep.
The first step is to identify your personal lifestyle goals such as losing weight, spending more time with the family or upgrading your job skills.
The second step is to identify financial goals. For example, you may be saving for a new car, new home or vacation.
The third step is to set a time frame for achieving the goals identified in steps one and two.
Step four is to look at what you have presently and what you owe. This is done by preparing a net worth statement which lists all your assets and liabilities - the difference is your net worth.
Step four is to develop a cashflow budget showing not just the money coming in form various sources of income but also your expenses and when they are due.
Step six is to develop strategies to achieve your goals in the time frame you desire, given your net worth and budget. These may include reducing your expenses or increasing your income, paying off debts or changing your investments to achieve a better return. This is the step where you may with to get some help from a professional.
Last but not least, on a periodic basis, monitor and evaluate your progress toward your goals, and make necessary changes in your strategies. Remember, your priorities do change as you move through life, so make this an annual exercise and call it your financial checkup.
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