Introduction

Financial planning helps you establish clarity around your money, enabling you to support your current needs and plan for long-term goals. With GuardianWealth’s personal finance app, you can make the most of your income, assets and achieve your wealth creation goals. Beyond budgeting, GuardianWealth’s personal finance app also creates a roadmap for how to achieve financial freedom. GuardianWealth comprehensive personal finance app provides an all-in-one finance platform empowering you with all the tools and resources you require to achieve financial freedom.

A financial plan documents your current financial situation, your long-term goals, and strategies you can use to achieve these goals. A personal financial plan outlines your cash flows, net worth, and achievable goals with a timeline. With a solid financial plan, you can easily save money, afford all your present needs, and accomplish all your long-term goals.

If you have been wondering why you need a personal finance app, then read ahead. It is in every person’s best interest to build wealth and achieve financial independence. Financial plans vary from one individual to the next. If you are single, you will need a financial plan that caters for your immediate needs while also forecasting your finances in future. If you are married, your financial plan should be discussed and arrived upon as a team. A personal finance app will help you understand the source of your income, where you spend most of it, and how you can optimize your savings and investments for wealth creation. GuardianWealth’s personal finance app makes this process easier, your current financial health is assessed, and an action plan is created to help you understand what is needed to achieve financial security.

Knowledge of your cash flows, budget, and capital will help you create a healthy financial life, and gives you a blueprint for improving your financial situation. There are countless advantages that come with having a proper financial plan. It is important to know exactly how to plan your finances for a financial plan to have a net positive effect in your life. You can do this easily and conveniently with a personal finance app. In the next section, we will explore the ten steps to creating a solid financial plan.

How to Create a Personal Financial Plan: A Step-by-Step Guide

It is never too early or too late to start planning your finances. With a comprehensive personal finance app, you will grow confident in handling your cash. Creating a financial plan is simple, and we have broken it down into easy, manageable steps that you can do via the GuardianWealth personal finance app. Here are the steps you can take to create the perfect financial plan.

1. Review Your Current Financial Situation

Before you begin planning your finances, you will need a starting point. Your current financial situation highlights your present net worth, income, and expenses. GuardianWealth’s personal finance app has an in-built financial health tracker that diagnoses your current financial status and offers an actionable plan to improve your financial security. Before you begin planning your finances, gather all your financial statements for the past six months. These statements include: loan statements, credit card bills, receipts from the past six months, utility bills, and investment accounts or more conveniently you can integrate GuardianWealth’s personal finance app with your bank account securely. These statements arm you with information on your income and expenses, which will help you create a solid budget. GuardianWealth’s personal finance app has a free budget planner that can also be used as a personal expense tracker. With better visual representation of your finances, you can calculate a baseline income using your monthly wages and estimate your average monthly expenses.

With this information, you can decide on which expenses to cut down on in order to improve your situation. You can also categorize your expenses and set spending limits, making it easier to prioritize your spending.

You will also use data on your assets and liabilities to estimate your financial net worth, which can be calculated as: Net worth= Net Assets-Liabilities

2. Set Your Financial Goals

Once you understand your current financial situation, GuardianWealth’s Personal finance app will help you chart your journey to financial freedom. Financial goals will help you create a solid, realistic financial plan. With financial goals, you can easily track your progress on the journey to wealth creation. Achievable goals are excellent motivators, as every time you accomplish a goal, you can remain disciplined toward your financial plans. Both Short and Long-term goals are also important since they will help you prioritize, trading off short-term desires for long-term objectives. With proper financial goals, you will always have a reason to celebrate milestones in your financial plan. Proper financial goals should be SMART:

• Specific: Make sure your goals are unambiguous, well-defined and clear, increasing the chances that you will achieve them.
• Measurable: All goals must have some criteria for measuring and evaluation, which will help you monitor your progress and keep track of your goals.
• Achievable: You should define your goals well enough that you are capable of attaining them.
• Realistic: The goals you set should be achievable within time and resource constraints.
• Timely: Every goal should have a start and finish date.

With GuardianWealth’s personal finance app you can set SMART goals. You can push yourself further, have a sense of direction and organize your resources to make your financial plan a success.

3. Create a Budget

Budgeting is a key part of the personal finance app, which helps you understand how much you will spend and save your income every month. GuardianWealth’s personal finance app lets you track your spending habits, and helps you follow your money goals. It also helps you categorize your spending and set spending limits. While it may be painstaking, setting a budget will go a long way in helping you keep your financial life in order. GuardianWealth’s personal finance app makes this process easier by automatically categorizing your expenses and providing a pre-fill option based on your historical spending. When coming up with your monthly budget, you should consider all your sources of income and expenses, to understand exactly where your money comes from and goes.

To help manage a sound budget, you could use the 50-30-20 budgeting technique. In this technique, you allocate 50% of your income to essential expenses, 30% goes to wants, and 20% goes to debt payment and savings. This calls for calculated adjustments to your expenses and will help build a sizable fortune with whatever income you earn.

4. Pay Off Your Debt

If you want to live a sound financial life, you cannot afford to ignore debts. Interests and repayments are some of the biggest obstacles to anyone looking to build wealth. So, as you start planning your finances, you should create a plan to pay what you owe. One of the financial goals in GuardianWealth’s personal finance app is debt reduction. When tackling debt, you should start with the high-interest ones, like credit card debt and title loans, as these slow you down the most. Working towards clearing your debt will help streamline your financial plan so you can invest with little pressure.

5. Create an Emergency Savings Account

Life is highly unpredictable, 2020 has reminded all of us the importance of a safety net for the rainy days. As you work towards being financially independent, do you think you are prepared to stand your ground if some disaster took away your income source for six months? In GuardianWealth’s personal finance app this is the first step to achieving greater financial security.

Having an emergency fund will help you stay afloat, and keep working to gain wealth even during a financial or personal setback. Experts don’t agree on an exact number, but your emergency savings should cover a minimum of 3 to 6 months of your fixed expenses. The funds should be kept in an account that is liquid, but with a bit of restricted access, so you can only use it when you absolutely have to. GuardianWealth’s personal finance app offers high yield savings account with a low-balance requirement. You could save regularly by setting up automatic payments and top it up with unexpected earnings like bonuses and refunds.

Having a healthy emergency savings account will keep you going steady in the case of a surprise expense, unavoidable costs or unexpected events.

6. Create an Investment Plan

For sound finances, you need to plan adequately for the future. This involves finding ways to make your money work for you, and how you’ll cater for your expenses after retirement. When you choose the Grow my Wealth goal in the personal finance app, you are building an investment plan that is not really about retirement but more about giving yourself options and achieving financial freedom.

Creating an investment plan involves putting away a chunk of your earnings regularly. It’s best to have a diversified investment portfolio. As you start off, you could use GuardianWealth’s Personal finance app to help you balance and manage your investment portfolio.

When planning for retirement, there are several variables to consider:

• Your desired retirement age, a realistic time you wish to stop working.
• The lifestyle you desire after retirement.
• Your health status, and those health problems you are susceptible to as you grow older.
• The rate of savings, which should match your total retirement income over the number of months you will save.

7. Review and Adjust

With a financial blueprint, it is important to revisit this plan occasionally on the personal finance app to make the necessary adjustments in case of major life-changing events. If you get a promotion and a raise, for example, you may need to increase the amount you put away for savings and adjust your spending accordingly. Marriage, divorce, and the death of a spouse are also major reasons to make adjustments to your financial plan.

It is important to stay the course and maintain discipline, avoid excessive spending and learn from your mistakes as the journey to independence will be long and arduous. Keep checking on your solid financial plan and try sticking to your budget.

Benefits of Having a Solid Financial Plan

There are plenty of social, emotional, and financial benefits to having a financial plan. These include:

• Manage your cash flow correctly
• Accumulate savings through personal finance discipline
• Enhance decision making, action, and career moves
• Set goals, and align your performance standards accordingly
• lear your debt
• Plan to live comfortably after retirement
• Have peace of mind, free of financial stress
• Improve your mindset toward money

Conclusion

A solid financial plan is the great first step toward wealth creation. GuardianWealth’s personal finance app is a good place to start. You can create a financial plan based on your current situation and future aspirations. You could also use their free budgeting app to better track and manage your expenses. You could use the GuardianWealth personal finance app to help manage a small but growing portfolio. It’s best to get started as soon as possible to make the best of the compounding effect on your financial habits and investments.