Yanna Williams Williams1
Professor Schiller
ENGL 135C
Saving and Budgeting for Financial Planning in the Future
The process of being able to control your financial situation, and manage your money to achieve personal economic satisfaction is financial planning. Financial planning is a great concept to look into or master. Living comfortably, meeting all your financial goals with little worries is something we all would like to look forward to.
There are six steps that need to be processed through in order to complete the financial planning process. 1) You want to determine your current financial situation, 2) determine financial goals, 3) identify alternative courses of action, 4) evaluate alternatives, 5) create and put your financial plan onto paper, 6) review and revise the financial plan.
Being able to save and budget your money is a key element to be able to start planning and setting goals that you will want to achieve. Saving allows you to have an emergency fund, pay for big items, plan for leisure activities, provide funds for short and long-term savings, and allows you to have extra income that is earned just from interest. The most common advice from financial planners: “Save more.” “Save all you can.” “Cut your spending so you can save more.”
Each person in your household has a unique financial position, therefore, financial activities must be carefully planned to meet specific needs and goals. This is where budgeting comes in. Budgeting is necessary for financial planning. Having a budget to follow allows you to set a limit to the amount of money you will be spending. You have to select categories and then know what is coming in and what is going out. Then you place money in each category. I was taught to do this with envelopes. I would list my categories and then place the designated amount in the envelope each month.
To set up a budget plan you must take four steps. First you must assess your current situation, determine personal needs, values, and life situation. Second you plan your financial direction, by setting financial goals and creating budget allocations. Third you want to implement you budget, by monitoring your spending, savings, and investment patterns. And the last you want to evaluate your budget, by reviewing your financial progress and making updates as needed.
Budgeting allows a person to know how much they can actually spend on various items. This also can give them the benefit of financial freedom, and living with no debt. It teaches them how to live within their income, spend money wisely, reach their financial goals and develop strong financial management habits. If someone fails to budget then they may fail at ensuring financial security for their family, overuse their credit, and not have a substantial savings plan.
Work Cited
James Kappor, Les Dlabay, and Robert J.
Hughes, Personal Finance 7th Edition.
