Plan Today For Better Financial Standing Tomorrow

Online, February 7, 2011 (Newswire.com) - Creating a sound financial plan is critical to maintaining financial stability and reaching your personal financial goals. In addition to showing where your finances are at any given moment, it provides a path to financial growth and comfort.

Key to this plan is evaluating your current situation. While your plan isn't static, you'll save yourself time if you create a firm foundation that can be easily altered as your circumstances change. You should re-evaluation your plan at least once a year.

Start developing your plan by determining your cash flow and net worth. To determine your cash flow, evaluate your monthly income and expenses from all sources. Your goal should be to be cash flow positive, so look for areas where you can cut expenses such as eating out, or increase your income. With things cash flow positive, you can begin building your savings.

Net worth is an important tool to determine your overall financial condition. To figure this out, calculate your assets and liabilities. Assets include cash, savings, investments, real estate and personal property. Liabilities include all outstanding debt, like your mortgage, personal loans, auto loan and credit cards. Your net worth is the difference between your assets and liabilities. Your goal should be to see improvement in your net worth each year.

Next, you'll need to manage risk. This is where insurance comes in. Making sure you have enough insurance is critical to shielding your finances from unexpected occurrences. You should carry insurance for health, auto, homeowners, life and disability.

Now that you've planned for short-term needs, you should add future financial goals to your plan. This might include when you want your mortgage paid by, when you plan to retire, vacations you want to take or the amount you wish to save for your children's education.

By setting these goals, not only will you see your overall personal financial picture improve year after year, you'll see your quality of life improve. So start planning today - for a better and brighter tomorrow.