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New Year, New You: Steps to Financial Planning Checklist 2023

4 January 2023
New Year New You Steps to Financial Planning Checklist 2023

Happy New Year! Did you make your new year's resolution yet? Whether that's a yes or no, don't forget an essential aspect of the ''New You" this 2023. It's time to focus on your financial life this year. Who knows, you might finally be able to get that much-awaited affordable house and lot you've been dreaming of. So we invite you to take a moment and go through Lumina Homes' 2023 Financial Planning Checklist!

 

 

Secret to Financial Success: Create, Stick, and Evaluate Your Financial Plan

Before you plan for any new goal, it's best to sit down and check. Ask yourself, "How am I doing financially?" We recommend that you review your current financial situation, so you get a true picture of your financial life, and how you can shape your financial future--provided you stick to your goals.

 

How should one review one's current financial standing? It's best to check your assets, expenses, and liabilities. Did you just buy a new car? Can you rival a shopaholic's credit card debt? Perhaps, you're also the type of person who owns a house and lot in the Philippines, a thriving business, or both? No matter which end of the spectrum are you, you should start preparing for successful financial planning. That's why you must review your previous' year-end financial checklist, and collect statements from all your bank accounts--just make sure they are updated account statements, check remaining balances, and interview the whole family so you have an accurate view of your finances and create your own financial strategy.

 

 

A Financial Planner's Steps to Financial Progress

Because every success begins with a first step and the same with financial success! Here are eight steps you can follow so you can kickstart your financial success this 2023.

 

Determine your financial goals.

First in every financial checklist is to set your financial goals. It starts with, asking yourself, what do I want to accomplish financially, in a year? While you could also tailor your financial plan to short-term goals, medium-term time frames, or even long-term time frames, it's best to start small so you won't feel overwhelmed, especially we're talking about money.

 

An example of a good financial goal is to build on your emergency fund. Meanwhile, an example of a medium-term financial objective is to get life and health insurance policies, may it be for yourself, your parents, your spouse, your children, or other family members. One of the best examples of a short-term financial goal is to curb your impulse buys especially when it's payday. These are just examples, but a good tip to remember is when you set your financial goals, they must be SMART--specific, measurable, attainable, realistic, and time-bound.

 

Why set realistic and appropriate goals, you ask? Because if you can achieve these financial objectives, you'll be motivated to hit greater financial goals, such as having your first investment — owning a well-designed yet affordable house and lot for sale.

 

Pay off your debts.

Let's admit it, it's hard to save when you have other things to pay for. Aside from the essentials, most people who dream of achieving financial freedom have debt. May it be a loan to a government agency, student loans, credit card debt, or even personal finance loans, having debts and paying them off is not an easy feat. It can even get heavier for you and the family with rising interest rates. It's best to set aside a budget from your income so you can pay your debts until you have paid them off. While debts have pros and cons, it still makes sense to limit spending and buying things with credit.

 

Here's a pro tip from a financial planner: as much as you can, pay off your debt as early as possible. This way, you can avoid accumulated interest and you can be nearer to the goal of being debt free.

 

Build your emergency fund.

What's the use of setting aside an emergency fund from your salary? If you will have any unexpected financial and medical needs for you and your family, here's where you can get the funds. More often than not, professionals often overlook its important role until such circumstances affect your budget. When you make emergency savings account a priority, you can avoid the regret of wishing you have opened one sooner. Likewise, a fully funded emergency fund can help you avoid getting into debt.

 

Get yourself insured.

Who here knows a financial advisor? With financial literacy at a boom in the Philippines, we have friends and family members who have become one. This is good news for us who wants to have better financial progress. We now know of someone who can assist us make good financial choices. While it is good if you have either life insurance or health insurance, it's best if you have both life and health insurance in one as medical expenses may be a burden if you don't have insurance. Just remember to get a life insurance policy with good insurance coverage.

 

A tip straight from a financial advisor: don't forget to review your insurance yearly. You can adjust your insurance cover, especially in terms of health insurance coverage. It's also definitely worth looking into other health insurance alternatives you can allocate your wealth. For example, you can always have auto insurance or car insurance to protect your vehicles.

 

Improve your skills in budgeting

Robert Kiyosaki, a well-known financial planner and author of Rich Dad, Poor Dad popularized this quote: "Pay yourself first." This could be your guide when you set up your budget. Instead of allocating a huge chunk of your salary to cover monthly expenses, you must make it a point to set aside a monthly budget for savings. Then, you can split the remaining as your budget to pay bills such as your expected food bill, rent payment, taxes, or debts. List valuables and services you use on a regular basis, as they are expenditures you must be aware of every paycheck.

 

While different budgeting strategies can come from every financial professional you can talk to, there are two ways you can start off with. The first step is creating your own spreadsheet for your family finances. List all expenses, resources, and credit card balances you anticipate paying on a regular basis and keep track of when the deadline for each.

 

With a spreadsheet, you can customize and be detailed as you prefer. Likewise, if you want to have a little help, you can always use a budgeting app to get you started on your budgeting journey. What matters in budgeting is getting the right asset allocation so you can get a good view of your financial condition.

 

For instance, everyone needs to pay taxes. Through the assistance of a tax professional, you can figure out how much taxable income and tax withholding you may have. To avoid getting caught up in the stress of the tax season, you can prepare ahead of time because you keep track of it as a regular expense.

 

Check your credit score.

Knowing your credit score in the Philippines isn't as common as it is in other countries, such as the United States or Canada. Nevertheless, it is still an important aspect of your financial checklist and journey. You can check your credit score through your banks, or you can discover yours through the following criteria. As having a good credit score can affect your future loans should you plan ahead in creating your investment portfolios, this step is definitely an essential aspect to prepare you for the coming year ahead.

 

Look for other sources of income.

A surefire way to grow your salary is when you have other means to support your family. Most professionals will agree that it's not enough that an entire family relies on a single income. Hence, in 2023, don't be afraid to look for ways to earn some cash. This may be in a form of getting a side job or creating family businesses. Since your family relies on you, they can also help secure additional funds to boost your family's income. This is especially true when the pandemic hit. A lot of home-based businesses were born, and it is because of the need to augment one's income. It's time to reevaluate; who knows, you can turn your passion into a thriving and accomplished family business in the coming year!

 

Start investing.

Perhaps when you hear the word investment, you become intimidated. There's no need, because investment isn't just about having a lot of money. You can still start small. You can start by opening investment accounts, building your investment portfolio conservatively with small yet consistent moves, and a healthy focus on risk tolerance.

 

However, investments do not only mean stocks or buying shares. You can even explore investing in real estate. Since the cost of real estate rises as time pass by, it is an investment worth the risk. You just need to have ample knowledge before you take the plunge into investing.

 

The steps we write here are just the tip of the iceberg. You could expect to know more about investing especially in real estate when you partner with Lumina Homes. Want to speak with several homeowners and employees who manage their assets well? We can help you with that. Speak to a Lumina accredited seller today to discover various ways we can help you attain your financial goals today!

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