Building a financial plan is a lot like starting a fitness program. If you show up at the gym and mindlessly walk around lifting weights and doing random exercises, you might see a slight change. But with a clear step-by-step plan, you can make some serious progress and crush your goals.
And if you need a little help or guidance along the way, why not check in with a trusted financial resource? Just like a personal trainer helps you sculpt your body with a workout plan, a State Farm® agent can lay a foundation to help you shape up your finances.
Are you ready to do this thing? Here are a few simple steps to help you get started on your own personal plan.
Find Your Starting Point. Sometimes, the first step is the hardest part of the journey. To begin, you need to get an accurate assessment of where you are before you know where you want to go. Take an inventory of your financial accounts, monthly expenses and all the ways that money leaves your hands. Evaluating your current spending habits may not be fun, but it is essential to help you build your success story.
Identify Your Destination. Without a plan, you may find yourself spinning your wheels and losing precious time that could be better spent building your financial portfolio. Also, it may sound strange, but the end goal is the perfect place to start. Financial goals don’t have to be lofty or complicated. Keep them simple and attainable, so you can take measurable steps, build traction and see progress quickly.
Make a Roadmap. To best manage your spending and saving, create a well-defined budget. Once you have a working plan, write out an itemized budget to help keep yourself accountable. Choose a system that works for you, like an app, computer program, or a simple pen and paper. Record where you are spending your money, then compare how your current spending aligns with your goals, noting where you can make adjustments to save more. Feel more confident knowing you have a plan and are on the right track, because when you follow a budget, you’re less likely to spend more than you have!
Keep the Change. Save regularly, starting now. Even the smallest amounts can make a big difference over time. The earlier you begin, the more time your money has to compound and grow. Virtual wallets come with perks that can help you save whenever you pay from your phone—just be sure to only download wallet apps from trusted sources and always use secure WiFi networks. Also, the next time you get a raise at work, reevaluate and change up your savings habits. By taking the extra income and saving it, you’ll be one step closer to your goal!
Track Your Score. Lastly, knowledge is power. Knowing your credit score is definitely an advantage, and the only way to improve it is to understand what it is! Your credit score is made up of five key components: payment history (35%), credit utilization ratio (30%), length of credit history (15%), credit inquiries (10%) and credit mix (10%). If you have a history of missing payments and maxing out your credit cards, it’s likely that you have a low credit score. But if you make your payments on time and stay under 30% of your limit, you’ll see a higher credit score, so build improving your score into your goals, aiming for the best possible credit range.
Now that you have outlined your goals and taken the first steps to building your financial future, why not sit down with a State Farm agent? It’s absolutely free to discuss your goals and create a personalized plan that works for you. To learn more about financial planning, visit LetsStartToday.com.