In our financial planning guide we have almost completed level 1 of the financial pyramid and are ready to move to the next step in our financial planning process. We have covered the basics of personal finance and financial planning and only if you have these steps completed should you move on to the next steps.
So far in our financial planning guide we have covered the base building of your financial pyramid:
- Pre-Work – We discussed some of the things you need to do before getting started with your financial plan
- Prepare Balance Sheet, Networth and Cashflow Statment – We discussed the importance of each and provided and Balance sheet and Cashflow Excel file
- The Financial Pyramid – We looked at the Financial Pyramid and the role it plays in your personal finance
- Budgeting – We discussed the importance of budgeting and provided some tools
- Setting Financial Goals – Setting financial goals is the first step in your wealth building process, we looked at how to set financial goals and provided financial goals worksheet
- Organizing Your Finances – Financial Organization is a hard skill to develop so we provided some guidelines to help you in this process
- Life Insurance in Financial Planning – Why is life insurance important in financial planning
- Emergency Fund – We looked at why emergency fund is important and provide some tips on how to get started
- Will and Powers of Attorney – This aspect is often forgotten in financial planning, we discuss the importance of it and provide a Will and Power of Attorney Kit
I suggest you take sometime this week review those steps and see where you are in your financial planning process. Although I post weekly for the series the real process is usually longer so do not be worried if you are behind.
If you have followed those steps you have almost completed the first Level of the financial pyramid and are almost ready for level 2 which is saving. However before we get to saving there is another important step in personal finance we need to cover, debt management and debt reduction. We will focus the next couple of posts in this series on debt management, we will look at:
1. Bad Debt vs Good Debt (if there is any)
2. Debt Management and Debt Reduction tips
We will also review Dave Ramsey’s “Total Money Makeover” and have a copy as a giveaway, so make sure you do not miss it!