To develop a financial plan, start by writing down your goals. From there you can map out a plan for how to achieve those goals. Evaluate your current situation and  research  ways to get you from where you are now to where you want to be.

Some form of financial planning is critical to growing wealth, but too much planning and not enough doing can actually destroy your wealth.

A corporate executive with a six figure income, large net worth and a family who depends on them may want to consider paying a professional to do a comprehensive review of their financial situation. However, young people with little net worth and little income don’t need to pay thousands of dollars to put together a financial plan. For most of these people, the best financial plan they could ask for is to save more money. And paying someone $1,000 to tell them that is not a good way to start.

Plenty of financial advisers will write a very basic financial plan for free, hoping that you will purchase other services through them in exchange. If you have a bank account, you can speak to someone at the bank who may be able to put something simple together for you. If you have a small investment account with a broker, there’s a good chance the broker has the ability to help you develop a financial plan. There are also plenty of places on the internet with tools you can use for financial planning.

For most people, spending a lot of money for a financial planner to draw up a large document that you will never read is a waste of time and money.

It’s important to have a plan,  but don’t spend all your time and money planning. Work on growing your income and cutting your costs so that you are able to save money and build your net worth. Once your assets are substantial and your financial plan becomes more complex, then you can consult a financial planner that can evaluate your situation and look for wholes in your financial plan.

Plain and simple, plans are necessary in order to reach a goal. When a person decides to run for a public office, he or she makes out a plan that includes where to get the necessary financing and how much will be needed for advertising, marketing, and other office expenses. Teachers must have a plan for what they will teach each day, each week, and each month. They are required to plan out when to give tests and to measure their students’ progress throughout the year.

If plans are so important, why do so many of us think we can manage our finances without one? Most people don’t use a spending plan.

Many people hear the word “budget” and respond negatively. They think of a budget as being restrictive, too limiting, and too legalistic. Yet, in truth, a budget can be very freeing; it can bring peace and break the bonds of being a slave to our money.

A budget is simply a plan – a plan for how to spend the money we have. A budget is a great way to make sure we are handling money in the best way.

Without a spending plan, it is impossible to know where your money goes each month and whether you will have available funds for the things you need. The “not knowing” can create feelings of anxiety and fear. Financial problems can cause stress in marriages and other relationships.

When you create a spending plan, you can have the peace of mind in knowing that your bills can be paid, you have funds available for emergencies, and you know what you can spend for the things you need and want.

What is Financial Independence? Why is it a worthy goal? To some, it merely means not relying on a parent or other loved one to help pay the bills. For others, it means freedom from all debt. For yet others, it means freedom from having to work for income.

Freedom from financial reliance on family/friends is a freedom that many young people earn in their late teens to mid twenties, as they get through college, earn a degree, find a job, and separate themselves from their parents. For many people, this is financial independence. They strive to be their own person, independent of the people around them, capable of standing on their own two feet.

Freedom from financial reliance on creditors occurs when you are completely free of debt. No mortgage, no student loans, no car payments, no anything. Aside from taxes, you’re free to do what you want with all of your income. This is often used as the definition of financial independence by those who advocate a strong anti-debt position. Setting it as your goal to achieve this type of independence takes a strong commitment to the “spend less than you earn” philosophy. This requires enough income to cover your basic expenses and more, a good grasp on how to control your spending, and a debt repayment plan that you’re committed to executing.

Many financially stable people view freedom from financial reliance on employment as true financial independence: an end to the financial reliance on employment. It doesn’t mean you have to stop working, it just means that income from your work is no longer a requirement. Many of the same principles for debt reduction apply here to achieve this goal. Spend less than you earn and invest the rest of it for the long term. Work on maximizing your income and minimizing your spending and sock away that difference.

Financial independence is a great goal, but as with any goal, you have to define exactly what it means for you and then define a plan to meet that exact goal.

Goals are important because they keep track of your progress, and they will allow you to adapt to the ever changing world we live in. You can either choose to run and hide from change, or you can embrace it. Either way, you will control it or it will control you.

Goal setting will provide you a sense of direction. It will give you the necessary strength you need, in order to handle any setbacks you face. By learning to effectively set goals you will become more confident. By working toward your goals, you will raise your self-esteem and self-respect. As you move forward toward accomplishing your goals, they will give you a tremendous feeling of personal pride and accomplishment.

Before starting your goal setting journey, determine your main purpose in life, the one goal that you want to accomplish more than any other goal. This is the goal that you desire with a burning intensity and that you absolutely want to achieve.

When you determine your main purpose, it will become a driving force in your life and all that you do. In order for it to be effective your main purpose must be clear, specific and measurable. It must be time bounded and committed to paper. It must be accompanied by a plan to achieve it. It should be the central focus and key measure of most of your activity. Once you start moving forward towards your main purpose, you whole life will begin to change.

Determine what you want

This sometime is the hardest step for most people, and thus one of the major reasons people fail. The ability to clearly define what you want can be very challenging because of our innate belief that we are not good enough or that we don’t deserve to be successful.

Take a moment, and determine how much you want to earn, what kind of home you want to live in, what kind of car you want to drive, what kind of activities you want to be involved with, about your health, kids, school, friends, etc. Be clear in setting your goals. Your success hinges on how clear your goals are. The clearer and more specific your goals are, the better.

Write your goals down on paper

Don’t underestimate the power of visualization. Take the time to write you goals down in clear, specific and measurable terms. Writing down your goals takes them out of your imagination and crystallizes them into the physical world. It takes them from being a wish to a place where you can see them and touch them.

Writing down goals combined with daily action towards achieving them, works virtually without fail. It unlocks your potential and subconscious mind in order to see and recognize opportunities in all areas of your life. Even though this works so well, it’s very difficult to get the average person to sit down and decide what it is he or she really wants in their life.

Set a deadline

The subconscious mind responds very well to clear specific deadlines. Setting a deadline deepens and intensifies your desire to achieve that goal and it will increase your belief that you can accomplish your goal.

When faced with big goals, break them down into smaller goals. For example break a one year goal into 6 months, 3 months, 1 month or even 1 week time-line. This will also make it easier for you to accomplish your specific goals and it will provide you with a very detailed plan of what you need to do right now to reach the next step of your goal.

In addition, creating a deadline will force your subconscious mind towards your goal, and in turn develop your motivation and drive. Deadlines also seem to attract the people and resources into your life that you need to accomplish your goal. This happens because once you have set a deadline your subconscious mind will gravitate towards accomplishing your goals.

If you happen to miss a deadline, simply get back on your feet and set another deadline!  If your knowledge changes to a point where you need to change a deadline do so, but don’t give up on the goal.

The primary reason people don’t set goals is due to a fear of failure. They are afraid that they will feel bad about themselves if they don’t reach their goals. Remember that if you fail to plan, you plan to fail.

Identify your obstacles

Identify the obstacles that stand between you and your goals, most specifically those roadblocks that stand between you and your main purpose. Ask yourself, “Why you have not reached your goals already?”

Determine what actions you need to change in order to achieve your goals. What stops most people from achieving their goals, is their endless excuses. 80% of the reason you are NOT achieving your goals is contained in yourself some way. What is going on around you is what is holding you back? Once you figure this out, you must focus all of your strength and energy on removing that key point. Many times by removing the number one roadblock, you can do more to help move yourself forward than any other single activity. Whenever you can identify a major obstacle or roadblock, you must face it head on and take control of it.

Identify your skills and resources

Keep asking yourself, “Why am I not at my goal already?” Determine what skills you need to achieve your goals; there is always something that is holding you back. Make sure you constantly search for the missing piece of the puzzle.

What is the one skill you developed and did it consistently enough that would have the greatest positive impact on your business? If you don’t know the answer, ask your mentor or coach directly. You must find this out; it’s the key to acceleration, leverage and multiplication. In order to achieve a goal you have never achieved before you have to apply a skill or ability you never had before.

The good news is that if someone before you has learned and become excellent at this skill, you can too. Believe in the fact that no one is better than you and nobody is smarter than you. If someone is more successful, than they simply worked at it longer than you have.

Identify your resources

Make a list of all the people in your life (friends, family, coworkers, people with special skills, etc.) that can either help you or hinder you in the attainment of your objective. Once you have that list organize it by priority.

The most successful people in this world are those who are the most meticulous and careful about the details in their lives. They tend to think on paper, check and double-check everything, and leave absolutely nothing to chance. The Average Joe on the other hand believes in luck, they are too lazy to write things down, they continually forget their purpose, and miss countless opportunities as a result of it. Inspiration can flash though our mind daily. If we fail to record them they can easily be forgotten.

Make a plan

Create a plan to accomplish your goal. List every detail you can think of. Keep adding to your plan and continue working until your plan is complete. This will take some time but once complete you will have created a powerful tool for your own success.

Once created,  prioritize your plan, by importance and relevance. Remove all your major obstacles, and then gain the skills and knowledge you need followed by the other more specific tasks.

Someone that knows what they want writes it down and makes a plan to accomplish it. A person, who focuses on a plan, is a stronger and a far more successful person than someone who is vague or unsure.

Take action

Action is critical for the success of your plan. It’s vital to do something every day that moves you closer to your goal.

Although it may take a tremendous amount of energy to get started toward a goal, once in motion it takes much less energy to keep moving. If you stop completely it takes a massive amount of energy to get going again. Successful people are action oriented – constantly moving toward their goals. Be actively working toward your goal on a daily basis.

Visualize your goals

Your mind cannot tell the difference between what is real and what imagination is.

Imagine your goals as accomplished so your subconscious mind has the ability to recognize and attract all the resources you need to make your goal a reality. The more real or vivid your visualization, the better or more effectively this works.

Believing in yourself and believing in the power of goal setting, is what will allow you to achieve success in your personal life.

Persevere

Never give up on your goals and mostly importantly, your main purpose, especially when the going gets rough.

Many people quit before realizing their true expectations. Only those that are determined to succeed, and those who refuse to give up will win in the end.

To go through the process of getting a reverse mortgage, you need to speak with a reverse mortgage originator or provider. They will counsel and guide you through the preliminary steps, including home appraisals, inspections, and choice of loan specifics. Speak with as many people as you need in order to gain information and feel comfortable with your lender.

There are a number of options for structuring the money received. You can receive a one time lump sum, receive the money monthly, receive a credit line that provides flexibility (in most states), or use a combination of these methods. Once you receive the money, there are virtually no restrictions on the way in which it can be used.

It will be your responsibility to repay existing debt, including the existing mortgage.

You will be able to make home improvements, finance basic living expenses, ease healthcare costs, take a vacation, or give gifts to family and friends.

There are costs involved. There is an origination fee, closing costs, a servicing fee, mortgage insurance, and interest. These costs come from the proceeds of the loan. You pay very little directly out of your pocket.

Default risk is one of the ways in which a reverse mortgage differs from a traditional mortgage or home equity loan. With those more traditional home loans there is a risk of default and therefore a chance you could lose your home. With a reverse mortgage, there are no payments to make. You cannot lose your home at any time during the life of the loan for failure to make payments. The loan does not come due until you permanently leave the home or the last borrower dies. The home must be kept up to reasonable standards, it must be insured, and the property taxes must be paid. As long as these standards are met, you will always have somewhere to live.

In addition, you can never owe more than the value of your home. Even if you have been paid more than your home is worth, you can only owe the value of your home. When the loan comes due, you or your heirs can either pay off the loan with existing funds or sell the house in order to satisfy the loan. Excess proceeds from the sale go to you or your estate.

Starting an emergency fund is a great way to spend your tax refund check. Just pretend you don’t have it. Why do you need an emergency fund? Because you never know what life is going to throw at you. Emergency funds can make things like car repairs, tickets home to see a sick relative, or exploding hot water heaters seem like small problems instead of huge catastrophes.

Many families create budgets. But, you can’t simply have a budget in place, you also need to learn how to maintain that budget. When used effectively, your budget becomes one of the best financial tools you have at your disposal.

The easy part is creating the budget – the hard part is sticking to it and learning to live within your means, especially if you’re used to relying on credit to get by.

Here are some ways you can make your budget work for you:

Put it on paper

When you set up your budget, don’t try to keep it all in your mind. It will never work! You need to write it all down on paper (or in a spreadsheet or financial software) in order to keep better track of what’s happening with your money. Assign your income to the various categories of expenses and bills you have to pay and take control over your money rather than letting it control you.

Use self control

Once you have your budget created (make it realistic so you at least have a chance to stick to it!) remove yourself from activities that might cause you to stray from the plan. If walking by the store makes you want to go in and buy something you don’t really need, take a different route!

The wise person who sticks to their budget avoids making these purchases or puts them off even though they might miss out on a good deal. In fact, make it a rule that all purchases must go through a 24 to 48 hour incubation period before you actually buy them. By the time you wait it out, you might realize you don’t really need or want that item as much as you thought you did. When you do go shopping, don’t go without a list and the will power to buy only what is on that list.

Focus on the long term benefits

If you stick to a budget religiously and pay off your debt, think about how much better your financial situation will be in three months… six months… three years from now. That should give you motivation and help you stick to your financial plan. Think about the great feeling you’ll have when you have an emergency fund ready to pay for emergencies and unexpected expenses that pop up from time-to-time that previously would have caused you to get a loan or pull out a credit card. Use that good feeling as a motivator to stay with your budget. Keep telling yourself that you are in this for the long haul and that nothing is going to take you out of your plan or off of your budget.

Don’t carry your credit cards with you. 

The most common response to this is “I need it for emergencies.” Ask yourself, “When was the last time you needed a credit card for an emergency?”

If you don’t have a credit card with you, it decreases impulse spending, and allows you time to find other creative solutions to a financial situation rather than incurring more debt.

Make a plan before using your credit card.

Make a list of the items you intend to purchase with your credit card. Plan a spending limit and develop a plan to repay the debt you are about to create. Statistics show that by simply having a credit card available when you shop, a person is likely to spend 1/3 more than originally intended.

Take 24-hours to contemplate before making a purchase.

This works especially well with catalog purchases and “impulse purchases”,  as they are not quite as appealing the next day.

Discuss your intention to use your credit card with another person.

Creative strategies and problem solving skills can be difficult to access when we are feeling anxious and stressed. It can be very profitable to talk to a person who is not going to judge, but will help you find alternative solutions.

To start your own plan you’ll need to first take control of your money. A simple statement that could prove to be much more complex than you first anticipate. Following a proven, step by step, process makes it so much easier to implement your finance plans. A good personal finance plan starts with a realistic budget. Realistic means one that balances. Your income must be sufficient to meet your expenses. If not, you have two options, increase income or reduce expenses. You’ll most likely find it more practical to get your spending under control first. Tracking your money is a crucial step in planning your budget and finances.

Your plans should include goals to manage debt and increase savings. Get spending and debt under control first. Then, set financial goals for future plans. If you have children, you may need to plan for college. And, it’s never to early to make plans for your retirement. Work these goals into your budget as if they were monthly expenses. Commit to pay yourself every month in planning for your future goals. Build an emergency savings so you will have something to fall back on when unexpected events arise. Planning for these events is the only way to keep your personal finance plan from derailing. It will keep you on track and headed in the right direction!

Personal finance planning is all about you. It’s about you and your family’s individual needs, dreams, and security. While you can simplify the process by using a standardized financial planner, budgeting software to walk you through the steps, or prepared worksheets, the data is all about you. Only you can plan for your future.

1. Don’t go into a store hungry!

If you go shopping for groceries while hungry, you are going to snap up the tempting goodies. You are using your stomach to guide your decisions instead of your head. It is estimated that families will spend up to 15% more when they go shopping just before lunch or dinner.

2. Don’t bring the kids to the store.

How often have you observed harried mothers with 2 or 3 children in tow at the local supermarket? These perpetually hungry mouths will bully their way to sugary treats; the mother will agree just to keep them quiet. These modern stores will also carry aisles full of toys; what child can resist the temptation to handle them and eventually scream his way into convincing his mom to add it to the cart?

3. Prepare a preestablished list and check it twice!

Again, the temptations are everywhere, aisle by wonderful aisle. Some shoppers simply grab whatever their fancy dictates at that moment, not realizing that the merchandise has been designed and placed strategically by marketing experts.

You must make a list at home and stick to it no matter what. Do not give in to the demands of your husband if he is with you; guys tend to favor impulse buying and they don’t know much about expensive vs. cheaper brands. Grab the local store brand whenever possible; it is usually cheaper than the better known national brands 

4. Know where you’re going and plan ahead.

Leaving the house without planning the route when you are going to several stores means more gas wasted. Think ahead and imagine the best way to get to your destinations. The freeway may not be the better option if you have to face bumper to bumper traffic. Crawling and idling will eventually waste more gas than finding back roads to the stores.

5. Become a member! Visit those discount stores.

Plan to shop at membership shopping clubs like Costco and Sam’s. You will recoup your annual fee very easily by buying staple items in bulk or when you need some expensive items such as desks, clothing, and computers. Buying large bags of meat (2 or 3 lbs.) is much cheaper than buying individual pieces at the local market.

Final word of wisdom:

Take advantage of special sales and buy several items at once. For example, toothpaste that normally costs $2.70 can be purchased for less than $1.00 each. School binders and notebooks could be bought for $0.25 each a month before school started. Seasonal clothes normally go on sale at the end of the season, so watch for special sales, then buy things in the off-season such as summer stuff in the winter and vice versa.