Five ways to start your Financial Road Map

The New Year is finally here. You must have your list of New Year’s resolution now, but I’m afraid that they will just be plans all year round because according to Forbes.com, only 8% of people achieve their New Year’s Resolution. I want you and me to be one of those 8% percent. So, I am sharing with you today the 5 ways to start a financial road map that I personally followed that are now gradually showering  me with positive outcomes.

Importance of Financial Road Map

Preparing your personal financial road map will let you be aware of every important aspect of your financial life. It will tell you where you are and how you’re going to get where you are going. Your personal financial road map helps you move forward towards your goal with knowledge, clear direction and confidence. 

Here are the FIVE steps I’m talking about.

1. Honestly determine where you are

Being honest with yourself in determining your financial state will reveal where you actually stand in terms of your financial situation. There are some who are still in denial and try to see themselves as financially free even though they are not. Some are still living in dreams that they are still able to finance their chosen lifestyles even though they are already buried in debt or are in a difficult financial situation. Mapping your financial goals won’t be a success if you are holding back or is not totally honest with yourself.  

a. List down where all your cash is coming from

Make a list of all your monthly sources of income. It may come from your full time job, from your sidelines or part time work, and from your investments if you already have one.

b. List down your permanent monthly financial responsibilities

Prepare a monthly budget of all your needs. This may include your house utility bills, school fees, food, your tithe and other permanent financial obligations.

          c. List down your debts

                    Make a list of your debts. Start it from the smallest to the biggest debt you                              have.

Now that you have listed your sources of money, where your money goes and how much you owe others, you may now have a clear view of your current financial situation.         

2. List your SMART goals

After knowing your financial situation, you now have a basis in building your financial goals for this year. Whatever that goals be, they deserved to be heard and be considered. Write your goals and see whether they are Specific, Measurable, Attainable, Realistic, Timely.

Make your goals specific so you can easily picture and achieve them. Let it be a measurable goal, too. Make sure that you can easily track your progress in the process. Consider your current financial state and determine whether your goals are attainable and realistic which can also be achievable in a set time frame. For example, can you achieve your goals within this year?

Don’t make a long list of unrealistic goals that you want to reach within this year or in a short span of time. Change does not happen overnight. I’m sure you don’t want to be overwhelmed and frustrated once none of your goals come into reality. Goals are motivating once you started reaching them.

Below is an example of goals this year that can be called SMART.

*Pay quarterly 1 of the existing loans (Getting out of bad debt)

*Write and market at least 3 e-books (creating passive income)

*Invest in the stock market towards the last quarter of this year

3. List ways to achieve your goals

You now have a list of your SMART goals. The next question will be, how to make them real. This is next to the hardest part in preparing a personal financial road map, but it is manageable. You just have to go back to your goals and list down small simple ways on how to achieve each of them.

For example, in order for someone to pay his loans quarterly, he may keep a certain part of his monthly salary for this. He may also think of ways to increase his cash flow and look for additional source of income to give him more cash.

4. Take Action

This is now the hardest step in achieving all the goals you have listed. Even though you have listed the ways to attain them and set a time frame to meet each of your goals if you won’t stand up and start to take actions, your goals will only remain as goals. Your dreams will only be dreams.

Let us be like Bro. Bo Sanchez. He reads his dreams everyday. He makes it a part of his life.  He include his list of dreams in his prayers. By doing all these, it will keep your motivation high. It will serve as your reminder to keep moving and implementing your plans for a better future for you and your love ones.

Don’t just wish for success. WORK for it.

5. Track your progress

Finally, you should also revisit your goals and see your progress. Compare your goals to a plant that needs to be watered and pruned in order to grow and bear fruit.

So, there, the five ways that helped me start with my personal finance. I’ve been doing it for more than a year and it somehow guides me on my money spending, saving and investing. I have again prepared my 2016 personal financial road map and I hope you will, too.

Happy saving and investing.

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