Tamworth Financial Advise
Step by Step - The Basics of Financial Planning
Welcome to our Financial advise guide at Tamworth Financial advise It is our goal to take the guesswork out of what it is to plan your finances and what it is to have a professional “financial planner” do it for you. To begin, it is prudent to understand what financial advise is all about so you can be sure you're getting a financial planner who has your best interest in mind.
We believe that effective personal financial advise starts with a thorough understanding of the following key concepts:
- Controlling your finances with a budget
- Establishing long-term financial goals
You need to control your day-to-day finances if you ever want to be able to do the things that bring you satisfaction and enjoyment in life. You can accomplish this with a budget!
Next, you need to know where you want to go with your money. This means choosing and following a course toward long-term financial goals, such as buying a house, sending your kids to college, or retiring comfortably.
These first two steps are necessary and crucial to creating a solid financial foundation on which to build..
The Budget
Tamworth Financial advise begins with budgeting. The budget is a framework in which you manage your money. Without a budget, can you even really say you have a financial plan? Probably not.
Let us define a budget then: a budget is a tool for tracking where your money goes. It does this by defining limits to expenditures as fixed dollar amounts so that you reach your goals – be they daily, weekly, monthly or yearly. A budget can be as simple as saying we will not spend more than $400 on food this month, or as complex as specifying the types of foods you will limit your spending on, such as junk food, fast food, eating out, eating in, etc.
For many people, the word "budget" has negative connotations and conjures scary images of charts, numbers and graphs. But instead of thinking of a budget as a chore, think of it as a tool in your arsenal to achieve financial success and peace of mind.
The importance of budgeting
A budget is the first and most important step you can take towards putting your money to work for you instead of being controlled by it – and forever falling short in the game of financial success.
To those of you who think you know where your money goes without keeping detailed records, you might be really surprised if you actually tracked your spending. We can almost guarantee you that much of your hard-earned money is going down the proverbial drain.
Keep track of every dollar you spend for about a month – all the soft drinks, parking meters, coffee and cake - We can almost guarantee you'll be surprised and perhaps shocked by how much all these seemingly small expenditures add up. One soft drink a day at $2.50 will cost you nearly $1000 a year. And you thought petrol was expensive. What an expensive habit it is if you drink a bought bottle of water or two a day.
Tracking your expenses gives you a sturdy sense of where your money goes and can help you reach your financial goals: saving for a down payment on a house, starting a college fund for your kids, buying a brand new sports car, advise for a comfy retirement, getting rid of those pesky credit cards, or simply saving for that long sought-after trip to Vegas. Budgeting can help get you all these things. There’s more to budgeting than meeting your financial goals. Did you know budgeting could save your marriage?
How often have you argued with your spouse or loved one about money? Have either one of you ever made a big purchase without the permission of the other? Ever gone to an ATM only to discover the account balance isn’t what it was yesterday? If your answer is no, you're probably a fictional character in a fairy tale. Unfortunately, fighting over money is all too common in most households.
In fact, the sad and sober reality is that financial matters are one of the leading reasons couples split up or get divorced. It should come as no surprise then that getting a handle on your spending, implementing a budget, and saving for the future can have tremendously positive effects on your relationship with your spouse or partner. To do so requires making the time and effort to understand your budget and your financial goals. And when it comes to your significant other, it's crucial for the two of you to be on the same page.
So it should be clear that although you are prepared for the enviable task of financial planner and finding a financial planner, you need to understand have a budget. It should be fairly clear that achieving your financial goals will be insurmountable without one.