PERSONAL FINANCIAL PLAN: Guide To Build Your Financial Plan

Personal Financial Plan
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Most people believe that it is unnecessary to stabilize their financial situation, which I believe is entirely misleading if you ask me. Nothing supersedes having your finances in check. A financial plan does not only help you save money, but it will create a roadmap to achieving personal long-term financial goals, regardless of how much or how little you earn. 

Creating a roadmap for the financial future is for everyone, and you too can have your finances totally in check. All you have to do now is to indulge in this article to learn the best software definition and how to create a personal financial plan worksheet. Let’s go!

Personal Financial Plan Definition?

A Personal Financial Plan definition is an ongoing process that’d reduce your financial stress, support your current needs, and assist you in building a nest egg for long-term goals such as retirement. This is important because it allows you to make the most of your assets while also ensuring that you meet your long-term objectives.

Further definition of a personal financial plan is a picture of your financial goals and strategies you’ve devised to achieve them. For example, details about your cash flow, savings, debt, investments, insurance, and any other aspects of your financial life

Steps in Making an Effective Personal Financial Plan

From the definition above, a personal financial plan creates a roadmap for your money and helps you achieve your goals. Financial planning can be done on your own or with a professional. However, there are steps to making an effective plan to ensure that you achieve personal financial objectives.

Read Also: FINANCIAL PLANNER: How to Become a Certified Financial Planner

#1. Set financial goals

Personal financial goals will guide a good financial plan. When you approach your financial planning from the standpoint of what your money can do for you — whether that’s buying a house or allowing you to retire early — it will feel more intentional.

Furthermore, make your financial objectives inspiring. Like what do you want your life to look like in five years? What about in ten and twenty years? Do you desire to own a car or a home? Are there any children in the picture? What do you see yourself doing in retirement?

You begin with goals because they will motivate you to take the next steps and serve as a beacon of light as you work to make those dreams a reality.

#2. Monitor your Money and always direct it near your goals

Determine your monthly cash flow — what comes in and what goes out. An accurate picture is essential for developing a financial plan, as it can reveal opportunities to direct more money toward savings or debt repayment.

Knowing where your money is going can help you make short-term, medium-term, and long-term plans.

#3. Get your employer match

A financial consultant would always ask, “Do you have a company retirement plan, such as a 401(k), and does your employer complement any portion of your participation?”

For the most part, 401(k) contributions reduce your take-home pay now, but it’s worth it to contribute enough to get the full matching amount because it’s free money. By the way, the maximum 401(k) contribution according to reviews is $19,500 ($26,000 for those 50 and older). Employer contributions are in addition to the limit. The IRS establishes these limits, which are subject to change each year.

#4.  Make certain that emergencies do not turn into disasters.

Putting money aside for emergency expenses is the foundation of any financial plan. You can start small — $500 is sufficient to cover minor emergencies and repairs, preventing a sudden bill from piling up credit card debt. Your next goal could be $1,000, followed by one month’s worth of basic living expenses, and so on.

Building credit is another way to protect your budget from sudden expenses. When you have good credit, you have options, such as being able to get a good interest rate on a car loan. It can also help you save money by getting you lower insurance rates and allowing you to skip utility deposits.

#5. Deal with high-interest debt

Paying down “toxic” high-interest debt, such as credit card balances, payday loans, title loans, and rent-to-own payments, is an essential step in any financial plan. Some of these have such high-interest rates that you end up repaying two or three times what you borrowed.

So, if you have revolving debt, a debt consolidation loan or debt management plan may help you combine several expenses into a single monthly bill with a lower interest rate.

#6. Invest to increase your savings

Investing appears to be something for wealthy people or those who are well-established in their careers and families. It isn’t.

Investment can be as easy as putting money in a 401(k) and as simple as opening a brokerage account (many have no minimum to get started).

Top Best Personal Financial Plan Software

Personal financial plan software and apps can help you master the fundamentals, become more efficient with your money management, and even discover new ways to meet your long-term financial goals. 

However, deciding the best software for a personal financial plan is governed by your current financial situation. Some personal finance software can assist you in mastering budgeting and expense tracking, whereas others assist you in managing your investment portfolio. Of course, your budget for personal finance software is important as well. 

Hence, this list of the best personal financial plan software includes both free and paid options to meet a wide range of financial objectives. So, go ahead,  take a look and you’ll be able to get your finances in order in no time.

#1. Mint

Mint is a well-known budgeting and expense tracking app. The software can import your bank and credit card information to analyze and identify areas where you can improve your finances. 

Further, it allows you to set up alerts for things like due dates and low balances to help you stay on track. These features assist you in avoiding costly fees for late payments and overdrafts on your bank account. 

Additionally. Mint will give you real-time information about how much you can spend on things if you’ve set up budget categories. This tool is available for free download and uses on iOS, Android, and desktop computers.

#2. YNAB 

YNAB is a personal finance software designed to assist you in improving your financial plan while managing your monthly budget. As you create your budget and manage your daily finances, the software will provide tutorials to help you tackle some of the more difficult financial topics. 

Even more, if you’re struggling with bad financial habits, YNAB can help you break them by teaching you a few simple financial management rules. Isn’t that awesome?!

Nevertheless, the software connects to your bank account automatically, integrating your spending data for analysis and budgeting tracking. You can keep track of how you’re doing concerning your monthly budget and take action if you’re going overboard. YNAB provides a 34-day free trial period during which you can use the software to determine whether it is appropriate for your personal finance goals. 

#3. FutureAdvisor

In deciding a software plan for personal financial future goals, you’d need to take a look at FutureAdvisor. The name says it all. This is a great option for DIY investors looking for low-cost access to a financial advisor. The investment software makes personal recommendations to help you diversify your portfolio, which you can choose to follow or ignore as you see fit. 

If you have at least $5,000 in investable assets, you are eligible to sign up for the software. FutureAdvisor manages the assets you deposit in the account for a flat annual fee of 0.5 per cent of the managed assets, billed quarterly at 0.125 per cent. When you deposit funds into your account, FutureAdvisor works to consolidate them into accounts with its partners, Fidelity or TD Ameritrade.

#4. PersonalCapital

Another interesting software plan for personal financial benefits is Personal Capital. This software lets you manage all of your financial accounts from a single platform. You can include your bank accounts, mortgage, as well as your investment accounts, to see your entire financial picture. 

Another, if you have multiple accounts, as most of us do these days, using Personal Capital can save you from having to switch between screens to see where you stand.

You can also get personalized financial advice based on your goals if you have a portfolio worth more than $100,000. While you will be charged a fee for this service, the financial advisors are required to give you advice that is in your best interests.

Even if you aren’t quite ready to hire a financial advisor, Personal Capital can help you keep track of your finances and investments in one place. The core software is free, but additional features may incur fees.

#5. Quicken

Quicken has been around for several decades and is one of the most well-known personal financial software plan programs on the market. The software can be used to manage various aspects of your financial life. For example, budget creation, debt tracking, savings goals, and even investment coaching. 

More interestingly, Excel worksheet exporting is available in the software plan for personal financial ease. It allows you to manipulate and perform additional calculations on your data. Bill paying is one of the more advanced features, which allows you to set up payment directly from the software. 

Moreover, you can even use it to track the value of your assets to calculate your total net worth accurately. The app is powerful enough to manage both personal and business expenses. And it even handles property management functions such as tenant rental payments. The software is available for Windows, macOS, iOS, and Android for a starting price of $35.99.

#6. Triller Money

What’s intriguing about this personal financial plan software is that it allows you to see all of your money in a worksheet. Triller Money automatically transfers data from your credit card, loan, and investment into a customizable Google Sheet or Excel template. 

Besides that, Tiller allows you to select from templates that organize your data for you or customize your spreadsheet to meet your specific needs. It will also send you daily emails summarizing your most recent transactions and balances. The service costs $79 per year or $6.58 per month, but you can try it out for free for 30 days to see if it’s right for you.

Personal Financial Plan Worksheet

Having discussed the top best software that can assist a personal financial plan, let us look at the worksheet plan that will assist in accurately visualising your financial profile.

#1. College Budget Template

The transition to university is challenging. You’re spending your first night away from your parents, and you have to deal with everything they did for you before—washing, cooking, and cleaning.

You must monitor your finances and avoid overdrafts and credit cards. What is the best way to go about it? Of course, with this college budget spreadsheet. This worksheet allows you to plan for the cost of your education over months, semesters, and years. It will further assist you in keeping a positive balance in your bank account.

#2. Income Statement Template

An income statement is a document that shows how much money you made and how much money you spent. They are used to provide a picture of financial health in both businesses and households.

This spreadsheet is intended for owners of small businesses. It enables you to take complete and meticulous control of your company’s finances.

#3. Savings Goal Tracker

The third worksheet for a personal financial plan is the savings goal tracker. Saving money is difficult. Especially if you don’t have a clear goal other than “have savings.” And, let’s face it, there are a lot of glitzy items for sale that can easily steal your money from your wallet.

How do you handle this? Visualize your goals and track your progress toward them. What better way to accomplish this than with this savings spreadsheet?

#4. Money Management Template

It’s difficult to balance the budget and avoid overspending when you have a mortgage, children, a car payment, and other expenses to keep track of. Therefore, you need a level of financial awareness that even Paul Krugman may not have. Alternatively, you could simply open Excel.

This home finance worksheet can compete with You Need A Budget software. It enables you to create a yearly budget to make projections about income and expenses while accounting for variable expenses and changes in income.

#5. Personal Monthly Budget Worksheet

If you don’t have a family and want to take control of your personal financial monthly plan, this may be the worksheet for you.

This Excel personal expense tracker allows you to create a budget tailored to your specific needs and then compare it to your actual spending. Also, there are sections for daily expenses, entertainment, and discretionary spending.

Lastly, this worksheet is only one page long and can be printed on a single sheet of paper in portrait orientation, making it easy to use.

Benefits of Personal Financial Plan Definition

There are numerous benefits to financial planning that are immediately apparent from having a personal financial plan. Financial planning has a net positive impact on every aspect of your life, from emotional and health benefits to social and financial benefits.

Even as there are several dozen benefits, some have a greater impact than others. The following are a few of the greatest benefits of developing a personal financial plan.

#1. Financial planning assists you in setting and achieving your goals

Individuals can use financial plans to create and set goals for themselves. Goals provide people with direction and purpose in their lives. When people have specific goals in mind, they have something to focus on.

Moreover, financial goals are essential for people who want to live a stable and enjoyable life. The worksheet definition of a personal financial plan is an integral part of everyone’s life because money is frequently used as a means to help people achieve their most cherished life goals. It is especially important to balance your finances with your short-, medium-, and long-term goals.

#2. A Source Of Motivation and Commitment

People don’t get motivated when they lack clear goals and are unsure of what is expected of them. A financial plan reduces financial uncertainty by providing clarity and indicating what you are expected to achieve. You are more likely to work toward a goal that you are familiar with and comprehend.

When you have a clear definition of a personal financial plan, there is no ambiguity to cloud your judgment. Also, when you’re ready to make positive changes in your life, the plan leaves little room for doubt. This allows for faster action, which leads to greater follow-through. The longer you wait before acting, the less likely it is that you will act

#3. Emotional and Mental Health Benefits

Having a financial plan to which you can refer can increase mindfulness about your finances, which in turn reduces money-related stress. When you have a plan in place, you are more likely to overcome setbacks.

According to a recent survey, 83 per cent of people with a written financial plan feel better about their finances after just one year.

More importantly, when people improve their lives in one area, it has a natural spillover effect in other areas of their lives. In other words, having a written financial plan can benefit not only your finances but also your overall health and well-being.

#4. Improves Financial Outcome

A financial plan frequently improves financial outcomes over time. Those who make plans are more likely to be financially prepared for emergencies and retirement.

Furthermore, a financial plan enables you to start with the end goal in mind. This provides people with the necessary perspective to balance their current goals and needs with their future goals and needs. A plan enables people to focus on both the present and the future.

According to Savology’s research, people who have a written financial plan are two and a half times more likely to save money for retirement. You must know better to perform better. A written plan assists individuals in becoming more aware of their financial situation so that they can begin to make better decisions.

#5. Financial Plan Helps Set Financial Standards

Finally, planning defines desired outcomes as well as milestones to define progress. These serve as a guideline for determining when things are progressing and when they need to be corrected.

Individuals should meet certain general financial standards to be in a good financial position. For example, having money set aside for emergencies, not getting into too much debt, saving for retirement, and other things.

When you have a personalized plan to follow, you will know exactly what steps you need to take to meet your objectives. Further, when you have a financial plan to which you can compare yourself, it allows for both self-improvement and self-evaluation. You will be compared to overall standards and given recommendations that will put you in the best financial position to achieve your goals.

What are the 5 main components of personal finance?

Even while personal finance has many facets, they all neatly fall into one of five groups: income, spending, savings, investing, and protection. Your personal financial planning must take these five factors into account.

What is the basic rule of personal finance?

Spend less than your income. Spend much less than you earn and put the difference in savings. Increase your income. Make your money work harder to earn more.

What are the 3 principles in personal finance?

There are three fundamental ideas that may be applied to each of these books: Spend less than you take home. Make your money work for you by using it wisely. You should be ready for anything.

What is the first step in personal finance?

Understanding your income and outflow of funds is the first step in any personal financial attempt. This is made possible by creating a budget. A budget also forces you to consider your financial priorities as you are creating it.

What is the most important thing in personal finance?

An important component of personal finance is having good money management skills. If people’s spending exceeds their income, they risk running out of money or getting into debt since they won’t have enough to cover their bills.

What are the key to have a good personal finance?

The success of your plan as a whole depends on your budget. No matter what stage your financial plan is in, you should continue to make contributions to long-term objectives like retirement savings. Another crucial element in achieving financial success and lowering stress levels is putting money aside for emergencies.


As you can see, there are numerous approaches to a financial plan, as well as numerous advantages to planning in general. The most important thing is to begin, not how you go about it. To begin, make an effort to develop a plan to help guide your financial decisions and improve your financial outcomes. Use the dynamism you’ve gained to keep moving forward and working toward your goals and final destination.

  1. Financial Planning: Overview, Types, Importance, Concept (+ Free PDFs)
  2. Personal Finance: Basics, Importance, Types, Management ( + Free Softwares)
  3. IFRS (International Financial Reporting Standards) List, Requirements, Compliance & Benefits
  4. Financial Planning: Definition, Importance Certifications
  5. Financial Model: How to Build a Financial Model

FAQs On Personal Financial Plan

What Is Personal Finance Example?

 An example of personal finance is debating whether or not to save five dollars or to spend it on a cup of coffee.

What Are The 5 Areas Of Personal Finance?

  • Saving.
  • Investing.
  • Financial protection
  • Tax Saving.
  • Retirement planning

What Is The 50 20 30 Budget Rule?

The 50-20-30 rule is a money management technique that divides your paycheck into three categories: 50% for the essentials, 20% for savings and 30% for everything else. 50% for essentials: Rent and other housing costs, groceries, gas, etc.

What Is 70 20 10 Money Rule?

Both 70-20-10 and 50-30-20 are elementary percentage breakdowns for spending, saving, and sharing money. Using the 70-20-10 rule, every month a person would spend only 70% of the money they earn, save 20%, and then they would donate 10%.

What Is The Most Important Financial Goal That Must Be Set First?

The biggest long-term financial goal for most people is saving enough money to retire. The common rule of thumb is that you should save 10% to 15% of every paycheck in a tax-advantaged retirement account like a 401(k) or 403(b), if you have access to one, or a traditional IRA or Roth IRA

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