Why you should have a financial plan. You never want to lead blindly with no vision of the future for your family. A personal or household financial plan provides the roadmap you need to make progress. It outlines exactly what your financial goals are (where you’re going) and then provides the steps you need to take to get there (how to get there).
Whether your goal is paying off debt, saving for a large purchase or planning for financial independence, a family financial plan is what directs you and provides the guidelines to make financial decisions throughout the year and beyond.
Review your expected income for the year. The first step in creating a solid financial plan for the year is to calculate how much income you expect to earn. While this could be challenging if you own your own business, you should have a rough estimate based on previous years or business projections. Error on the side of being conservative if you just aren’t sure.
Review all your debt and your plan for paying it off. Next, review all of your debt and know how you plan to attack it this year. You should have a very clear idea of how much you will pay each month to your debts and the method you will use to determine which account to pay off more aggressively.