Robert Stanlick


Financial Planning Tips for Beginners

November 30, 2022by admin

Many want to create a budget, make a financial plan, or manage their investments more actively. However, newbies to financial planning may feel overwhelmed due to the volume of “professional” financial advice available. Having one straightforward initial step might be useful for getting started.

Here are some recommendations from top financial consultants to help you get started on the path to more actively tracking and managing your money.

  1. Begin by picturing the outcome:

Spending time considering the end is the first step in creating a financial strategy. You get out of bed every day to go to work and largely to get through the day. Rarely does anyone take the time to consider their motivation for working or the kind of lifestyle made possible by their job? Having a vision of what you want out of life and knowing your spending and income is crucial.

  1. Be aware of your spending:

A financial plan must be built on the solid basis of knowing where your money goes daily, weekly, and monthly. One drawback of utilizing cash is that you can’t fully track it. I advise using a debit or credit card to keep track of all your spending, organize it, and utilize it to lay the right foundation for a new financial strategy.

  1. Your net income should be known:

You are saving before retirement is a must for everyone, regardless of age. When listing your monthly earnings and outgoing costs, ensure you start by looking at a net income number. Your net income is the amount that remains after you have saved 15% of your gross income in taxable, tax-deferred, and tax-free accounts. Also automatic should be these 15 % savings.

  1. Your set burn rate should be exact:

I always advise salespeople to increase their sales if they are experiencing a cash flow issue. The majority of people, however, are not given a chance to increase their income. This implies that you should first be aware of your set monthly expenses. After that, you may plan your spending around your set expense.

  1. Make use of several bank accounts:

Budgeting and planning may be challenging when using a single bank account. Set up distinct checking accounts for each component of your budget, keeping the total to five categories or less. In this manner, it is simple to determine how much money is still in your budget without constantly crunching numbers—because, let’s face it, that’s never going to happen.

  1. Contribute to an investing account once every month:

Making a budget is challenging and rarely the most enjoyable task. So keep it straightforward: Moves money from your account into an investment account after each paycheck. Remember, this is an investing account, not a savings account. You are less inclined to just put the money back into your bank account and spend it if you save for the future.

  1. Make contact with your network:

Consider your network first. Utilize your relationships if you’re a business professional. Asking other companies has given me some of my greatest templates and resources. Professionals are frequently ready to offer templates and suggestions from when they first started.

  1. Pay your bills first:

Once you get paid, set away a portion of each paycheck and deposit it into a different bank account. Once their paycheck arrives, most people become behind on their payments and wind up with very little left over for savings. Being disciplined and paying yourself first will make it necessary for you to live on less money than you earn overall.

  1. Verify your credit rating:

Check your credit score once you’ve calmed down. The process of doing a financial inventory starts with this. Your ability to choose the sorts of credit you can get and at what interest rate depends on where your credit score falls. Additionally, consolidating your loans into a single low-interest account may make sense if your FICO score is in the moderate-to-high range (i.e., 650+).

  1. Make use of the resources at hand and move slowly:

Check with your bank or credit card to see if they provide free financial planning tools. Take baby steps, such as automating your savings, to begin (I use And now for some tried-and-true guidance: Increase whatever work-related retirement plan contributions you can make. Saving money for yourself, getting more from your company through matching funds, and paying less in taxes are all advantages of this strategy. Understand the purpose of your investment.

I would advise beginning by comprehending your investing objective (regular income or long-term savings). Understanding the investment horizon is also crucial. Since you cannot time the market and are prone to fall into behavioral finance traps, short-term speculative transactions that involve “buy cheap and sell high” must last at least two years.

  1. List all of your sources of income:

I deal with successful business owners and executives who frequently get revenue from various sources. Building a comprehensive strategy might be challenging when your financial position is complex. For this reason, before creating the plan, I focus on the specifics first by logging my income, spending, and assets. I advise anyone encountering complexity to use the same approach.

  1. Arrange your accounting documents:

Work meticulously on all the data collecting when you go out on the journey of creating a financial plan for the first time. Take advantage of the chance to arrange the location where you maintain your financial data. This might comprise financial records like bank and investment statements, insurance policies, current monthly costs spreadsheets, copies of the estate papers, etc.

  1. Use internet tools for budgeting:

Resources for budgeting and financial planning have advanced significantly since the days of checkbook balances and graph paper budgets. You can connect your entire bank, credit card, and other accounts to one location, keep track of costs, set savings objectives, and establish budgets with the help of free and simple online programs like Mint, Personal Capital, and Pocket Smith. These tools make a complicated procedure easier to understand and start.

  1. Begin reducing your expenditures:

Small changes like making your coffee at home and only purchasing on sale days may add up when creating a new budget. Spend your money only sometimes each month on items you truly like. As a result, you develop the habit of living within your means and might save more money than you spend.

Copyright © 2020 Rocky Mountain Wealth Partners - All Rights Reserved. Securities and investment advisory services offered through Geneos Wealth Management, Inc. Member FINRA/SIPC This content is developed from sources believed to be reliable and is for general information only. It is not intended to provide specific investment advice and should not be considered a recommendation or solicitation for the purchase or sale of any security. Opinions, estimates, forecasts, and statements of financial market trends are based on current market conditions and are subject to change without notice. Rocky Mountain Wealth Partners and Geneos Wealth Management, Inc do not provide tax or legal services. Please consult tax or legal professionals for specific information regarding your individual situation. Check the background of this financial professional on FINRA's BrokerCheck