Build a Balanced Financial Plan

Financial planning may confuse someone who wishes to build a balanced financial plan for themselves. Balancing your goals with your income is helpful, and it can be done without a degree or paying an expert. Focus on the future, while spending wisely in the present, and you can balance your way to financial health.

Start with your net worth. Calculate your net worth by assessing all debts compared to your assets. Assets should be items that you could liquidate for cash, including any equity you have in your home. Your net worth would be your income plus assets minus debts.

Budget your money. Calculate your monthly income, reserving money that can be put into savings. Be realistic If you save more than you can afford, you will most likely injure your financial stability in the future. Begin saving reasonably. As your income increases over time your savings will increase as well. The main point is to begin budgeting and saving as soon as possible.

Invest in your future. Put enough money into your company's 401k options that will allow for the maximum matching input from the company. If they match up to 6 percent, then make that your starting goal contribution. Once you are fully vested in your 401k that is money that you can transfer to another job or roll over into a IRA. Invest in companies and stocks that have a risk factor relative to your status. If you are younger, you can invest in high-risk stocks because you will have time to recover any losses you may incur. If you are closer to retirement, these stock options are not a good idea.

Plan for retirement. Don't rely on social security benefits to cover your golden years. Along with a 401k plan, invest in a pension plan that will help you squirrel money away for retirement. Understand that most pensions and 401k plans will not pay out to you until you are of retirement age. Build a balanced financial plan that will help you retire at 65.