# How to Make a Personal Financial Plan

Learn how to create a personalized financial plan to secure your future! Follow these steps to manage your finances effectively.

No one will take care of our financial well-being better than ourselves. A clear and reliable plan is needed to properly distribute a personal budget. And now, not tomorrow, is the perfect time to make one. That’s what Sveta, the heroine of our article, thought. And she sat down to count her expenses and income.

## Step one: Calculate monthly income and expenses

on the 10th she receives her salary – 70 thousand rubles. This became the main item in the “Income” article . She does not yet have any profit from business or assets (for example, a rented apartment or investments).

Sveta uses the CoinKeeper app , but there are others, too, such as Zen-money and Tyazhelovato . You can also keep track of things using online banking, Excel, and an income and expense diary, such as Home Accounting .

Sveta divided the “Expenses” article into mandatory payments and unplanned purchases. On March 10, she summed up the results for February and decided which items to add to the plan for March.

Expenses for February

 Obligatory payments Sum Remainder Apartment rent and utilities 20,000 rubles 70,000 – 20,000 = 50,000 Payments on two loans 15,000 rubles 50,000 – 15,000 = 35,000 Nutrition 8,000 rubles 35,000 – 8,000 = 27,000 Directions 2,000 rubles 27,000 − 2,000 = 25,000 Mobile communications, internet and subscription to online services 5,000 rubles 25,000 – 5,000 = 20,000 Dance studio membership 4,000 rubles 20,000 – 4,000 = 16,000 Household chemicals (cosmetics, care, hygiene products) 5,000 rubles 16,000 – 5,000 = 11,000 Total 59,000 rubles Unplanned purchases Sum Remainder Birthday gift for mom 5,000 rubles 11,000 – 5,000 = 6,000 Going to a cafe with friends 3,000 rubles 6,000 − 3,000 = 3,000 Total 8,000 rubles Total 67,000 rubles

On the day she received her salary, March 10, Sveta had 3 thousand rubles left. At first, the girl was glad that she had not spent all the money. But then she realized that she had not put aside any money for the year’s expenses. Sveta also forgot about her savings.

Financial results for February

 Income Wage 70,000 rubles Expenses Obligatory payments 59,000 rubles Unplanned purchases 8,000 rubles Total 67,000 rubles Free money 3,000 rubles

Then she added an item for annual expenses to her March plan.

## Step two: Calculate annual expenses

Sveta divided this expense item into four points and calculated the approximate expenses she would have to incur.

Annual expenses

 Preventive health services (eg dentist) 10,000 rubles Holidays in Crimea 50,000 rubles Seasonal clothing 10,000 rubles Large purchases (eg a new phone) 20,000 rubles Total 90,000 rubles

Sveta divided the resulting sum of 90 thousand rubles by 12 months and realized that she needed to put aside 7.5 thousand rubles.

This amount is too much for Sveta’s monthly budget. Therefore, firstly, the girl began to look for an additional source of income. Secondly, while Sveta was still searching, she reviewed her annual expenses and found ways to save.

 Annual expenses Ideas for reducing them Preventive health services Leave unchanged Holidays in Crimea Check the cost of air tickets, accommodation, and promotions before the season opens. Perhaps you can book everything in advance so as not to overpay later Seasonal clothing Buy winter clothes on sale Spontaneous large purchases Save up money and only then buy a new smartphone. This expense is out of your budget for now

## Step Three: Savings and a Safety Cushion

By March 10, Sveta had 3 thousand rubles left from her previous salary. The money was literally just enough. The girl decided that she definitely needed a safety cushion. Then she opened a separate savings account in the banking app.

Sveta decided to save up enough money to live on for at least three months. This is useful in case of force majeure, such as losing a job.

Usually financiers advise to put aside small amounts every month – about 10%. That’s what Sveta did and put 7,000 rubles into a savings account on March 10 – 10% of her salary of 70 thousand rubles.

Sveta’s friend, a financial consultant, suggested to her that a bank deposit is a great way to accumulate a cash reserve. However, it does not provide as high an income as an investment account. Sveta was interested in the issue, but decided to first study the basics of the stock market.

In addition, Sveta read in the book “Girl with Money: A Book about Finances and Common Sense” by Anastasia Veselko: an investment account should only be opened if you do not have loans. This point became the next in her plan.

## Step Four: Review and Close Loans

Sveta has two loans. She pays 15,000 rubles a month on them – minimum payments are 6,000 and 9,000.

• The girl took out her first loan three years ago to buy an expensive hair styler. She still has 10 thousand rubles to pay off.
• The second one was three months ago, to open my own business producing PP chocolate.
• Sveta’s total debt is 50 thousand rubles.

Financiers divide loans into “harmful” and “useful”.

• Sveta’s first loan is “harmful”. The girl has been paying the minimum payment on a loan for three years now, which does not enrich her in any way.
• The second loan is “useful”. Sveta borrowed money for her own development, and in the long term it will pay off with business profits.

Realizing that the first loan had been weighing on her for several years, Sveta decided to close it. She paid off the remaining debt of 10 thousand rubles from her salary.

It is logical that in March Sveta will have to cut some of her expenses. For example, she will have to give up subscriptions to online services that she does not use. In addition, the girl no longer needs to buy a gift for her mother.

But Sveta got rid of the annoying debt and reduced this expense item from 15 to 9 thousand rubles. She is ready to set goals.

## Step Five: Set Financial Goals

Sveta has two goals – short-term and long-term .

### The first goal is to buy a new phone

The smartphone that Sveta wants costs 21 thousand rubles. She plans to buy it in 6 months. That is, every month starting in March, the girl must put aside 3.5 thousand rubles.

Then in September Sveta will achieve her goal – realistic, specific and with time constraints.

### The second goal is a honeymoon in the Maldives

The trip costs 200 thousand rubles. Sveta and her future husband want to go on it in a year. They split the expenses in half. That is, over the course of 12 months, starting in March, they must put aside approximately 16,670 rubles, or 8,335 rubles each.

Then in March of next year Sveta will reach her goal. It is specific and time-bound, but not realistic.

Considering Sveta’s expenses, savings account and loan repayment, she needs more time and an additional source of income. So the girl decided to suggest to her partner to postpone their honeymoon for two years and continue looking for a part-time job.

Sveta promised herself to review her goals once a quarter and make changes to them. Perhaps in three months she will not want to fly to the Maldives and will set herself another long-term goal.

##### byAbdullah Sam
I’m a teacher, researcher and writer. I write about study subjects to improve the learning of college and university students. I write top Quality study notes Mostly, Tech, Games, Education, And Solutions/Tips and Tricks. I am a person who helps students to acquire knowledge, competence or virtue.