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When thinking of your future, you have goals in mind. You may want to purchase a home, or have a comfortable retirement. Maybe you just want to have a financially comfortable life. Dreaming about all of this is fun, but without a plan, they will probably be just dreams and not reality. Having a personal financial plan is very important in making your goals and dreams become a reality. The following steps will give you a basic, personal financial plan that you can make your own.

List Your Goals

Goals are a major part of a financial plan. Determine what kind of lifestyle you want now and in the future. You then want to make a list of goals that cover every facet of your life. The following are some examples of categories to help with your list.

  • Occupational: To achieve the lifestyle and future you desire, income is the key. Think of ways you plan to increase your income, whether through raises or promotions. Perhaps changing jobs is what is necessary to achieve the level of income you want.
  • Retirement: Determine the retirement lifestyle you want. Set your personal financial goals in step with this lifestyle to ensure you have the type of retirement you want.
  • Education: Whether you want to further your education, or pay for your children’s, it is important to determine what you will need to be able to achieve your educational goals.
  • Lifestyle: Do you like to travel? Have a nice house or car? It is important to determine what kind of lifestyle you desire or are comfortable with.

Set a Time Frame for Achieving Your Goals

Once you have determined what your goals are, you want to have some idea of when you want to accomplish these goals. Divide your goals into three categories.

  • Immediate Future (less than a year)
  • Near Future ( in 5 years)
  • Extended Future (in 10 years)
  • Distant Future (over 10 years)

Organize Your Financial Records

Before you determine a budget, you need to be aware of what you are spending on a regular basis. Gather your bills, bank statements, pay stubs, mortgage statements, investment statements and the like. You want to be well informed in regards to your whole financial picture.

Create a Budget

A budget is the primary tool when creating a personal financial plan. Write down all your expenses that you pay each month as well as your monthly income. You want to know where your money is going so you will be able to make any necessary cuts in regards to excess spending.  The money you gain from cutting excess spending can go towards accomplishing your financial goals.

When creating your budget, be sure to include your goals. Determine the amount of money you will need to achieve your goals in the time frame you specify. Also, include any income you are expecting that is not from your regular salary, such as bonuses, selling items and investment income.

Be Committed To Your Plan

In order for you to be successful in your financial planning, it is important to be committed to the plan you have chosen. Always straying from your set spending plan can cause a very adverse effect in achieving your goals and financial future. Always follow the steps you have outlined for yourself.

Make Changes to Your Financial Plan When Necessary

Life has a habit of getting in the way of any plans we make. There are unexpected expenses such as medical problems, accidents and repairs that can quickly wreak havoc to your well-thought-out plans. Update your financial plan accordingly to life’s circumstances. If you need more income to achieve your goals after a large unexpected expense, plan on ways to generate more income to bring your plan back in line to what you want.

This article is provided courtesy of Sam Burgoon, marketing and social media executive for Credit Season, a personal finance website that strives to help people improve their money management skills and overall finances, while delivering the latest and most relevant news from the financial world. Follow Credit Season on Twitter and connect on Google+ and Facebook.