If you have worked out a financial strategy, then you have the best weapon against money problems you may encounter in the future. With a plan you can organise your income properly and you are set up to save and invest as you see fit. You can look after your money without having the panic, worry and stress associated with a lack of funds and not enough money today or in the future. A financial planning strategy should be followed both for your personal finances as well as for your business.
When planning your financial strategy: the first step is to gather together any info you can on your current financial status. You should already have some idea of your incoming and outgoing funds. Collect together bank statements, credit card statements, utility bills, mortgage or rent payments, etc and put them all into a spreadsheet, or into an online money management tool.
The next step is to set out financial objectives. Separate these into short term, medium term and long term; and weigh your income against your expected expenses, future purchases, and any other needs. Make sure you leave plenty of extra cash each month for unexpected payments or things you might not have thought about.
This will be the blueprint of your financial plan. From here, it might be worth considering getting help from an Independent Financial Adviser, who will be able to guide you as to how best to spend your spare money, whether it be savings or investments. They will analyse your financial portfolio and come up with a financial strategy that suits your objectives. If you don't want to hire an IFA, then you'll need to do this next step yourself.
Research different bank accounts, liaise with different investment companies or pension companies. Try to find out what is the best way to invest the amount of money you have to invest on an ongoing basis that will best achieve your financial objectives, or will give you the best return on investment. Also take into account the risk associated with each option, and the amount of time you are willing to work at it. A stock portfolio, for example, will require more time and is more risky than a high interest savings account or a low-yield bond. Another factor to consider is liquidity. How easy is it to turn your investment back into cash if you need it for an emergency?
Now whether you have written it yourself, or whether it is based on the advice and recommendations of an IFA, you will now have a plan for your financial strategy. Once the plan is in place, it should be fairly simple to keep it up-to date, with revisions whenever necessary. A good financial strategy will be constantly tweaked as time goes on. This way you will always stay on top of your finances and achieve your financial goals.
