10 Steps Of Financial Planning: How To Monitor Finances

10 Steps Of Financial Planning How To Monitor Finances

Why Financial Planning Important

Most of us, including myself, missed the importance of organizing payments. As a result, a lack of financial planning often leads to financial disaster.

Thus, I am as guilty as other procrastinators who repeatedly make the same mistakes. In contrast, I am not a financial adviser but a regular individual striving to achieve a debt-free life.

I have created these financial planning steps to organize and monitor transactions from bills, debts, income, expenses, savings, and financial objectives to achieve the goal of financial reconstruction.

Financial planning is essential for individuals striving to achieve a better direction for their money. Proper financial monitoring will guide us on how well or bad our spending capacity is.

Frequently, without proper tracking, we tend to spend more than what we are earning—overspending is the most common reason for staying deep in debt and overdraft on finances.

Here are some benefits of financial planning:

1. Avoid Overspending Money

Suppose you could establish proper financial planning for your income. You will know precisely where every dime is distributed in your budget and will avoid the incidence of missed payments. Hence, you will be able to avoid overspending because you have allocated your income correctly.

Financial Planning-Avoid Overspending Money
Financial planning is an excellent way to plan your expenses and avoid the unwanted overspending of your money.

2. Avoid Missing Payments.

Similarly, when you overspend, you tend to miss some of your payments too. With this precedented predicament of missing your payments, you will undoubtedly encounter another burden of paying extra fees and interest.

In contrast, proper financial planning will serve as a constant reminder for you to avoid the consequences of neglecting the essential obligation.

Financial Planning-Avoid Missing Payments
Financial planning, if done religiously, will lead you down the path of paying off your bills on time.

3. Create Extra Money For Savings

How does that work? Proper financial planning will allow you to set aside extra money for savings. Because you will have a clear concept of adequately allocating your money, you will also be conscious of how you spend your earnings.

Importantly, you will have a clear concept of keeping part of your income after all your deductibles.

In other words, If you are following proper planning to cover all these financial obligations, you can accumulate extra cash for your savings and emergencies.

Financial Planning-Create extra money for savings
Financial planning will enable you to accumulate extra money for savings.

4. Avoid Stress

Indeed, accumulating bills, payments, and add-on interest is a real pain. It causes all sorts of stress in life.

Whereas, with proper financial planning, you can avoid the burden and stress of paying interest, overspending, and not having enough money for payments.

Overall, you can attain a good quality of life because you know your finances well and your spending limits.

Financial Planning-Avoid Stress
Financial planning will save you from the exhaustion and stress of financial obligations because you will know you are in control and how to allocate your money.

How To Start Organizing Simple Financial Planning

First, start any financial planning by creating a master plan. For this reason, I made a step-by-step plan to help understand my cash flows. I also created the project by starting ultimate financial planning in planners.

1. Track Your Bills To Start A Simple Financial Planning

We all have bills to pay, such as utility bills, subscriptions, and others. Examples of these utility bills are electricity, water, and sewer. At the same time, subscriptions include your phone line, internet connection, apps, or perhaps entertainment like a TV subscription. Here are the ten essential steps to organizing the payments:

It is vital to start your financial planning by tracking your monthly bills as they are necessary for your daily undertakings, such as electricity and water consumption.

This bill tracker will show you the number of bill accounts and the due dates.

In the weekly column section, you can either mark a check or (X) each of the weekly columns according to the bill’s due dates.

Hence, you can track your bills simply by writing the due date in the section and not utilizing the weekly column if you wish.


Track Your Bills To Start A Simple Financial Planning
The financial planning bill tracker will organize your bills separately from your other payments.

2. Tracking Your Debts, A Vital Step Of Financial Planning

Debts are considered short-term or long-term payments, including your mortgage, car loan, other personal loans, and credit cards. Payments should be separate from debt from your bill payments and expenses because tracking these payments requires recording your remaining balance.

Consequently, monitoring each remaining balance after you pay it each month allows you to anticipate which debts you need to pay sooner. The Debt Tracker can help you monitor the lesser payment balances and pay them off faster, such as credit cards.

Credit cards accumulate high fees with one missed payment. Thus, Eliminating the smaller debts more quickly will give you an add-on budget for your vast debts on your mortgage and car payments.

Financial planning with tracking your debt serves the purpose of avoiding the confusion of all your payments, while this tracker will organize term payments from your other obligations.


Tracking Your Debts, A Vital Step Of Financial Planning
The Financial Planning Debt Tracker will give you in-depth monitoring of your long-term and short-term payments.

3. Tracking Expense Budget In Your Daily Financial Planning

Another is tracking your expense budget. For the expense budget tracker, you will write down the goals of your money and total expenditures for the month. Similarly, this will enable you to control your unnecessary expenses.

This sheet is an expense budget plan, which means you will write down all of your essential expenses, like a budget for groceries, fuel, gasoline, and others. Grocery categories include food and drinks, pet care, cleaning supplies, beauty and personal care, pharmacy, etc.

To illustrate, you will set a budget or allocate an amount for each category item every week and compare it with the actual expense at the end of the week.

Furthermore, you will need a daily expense sheet to organize your daily spending from Monday to Sunday so you can write down your itemized expenses.

At the end of the week, you calculate all your expenses and record them in the “actual” column on the expense budget tracker.

The bottom page of the expense budget tracker will enable you to write down the type of:

  • The actual expenses you spend the most on
  • The reason why you spend the most on this item is
  • To plan on how to avoid or minimize this type of expenditure


Tracking Expense Budget In Your Daily Financial Planning
In financial planning, you need to consider the expense budget tracker to compare your allocated budget for expenses to your actual payment every week.

4. Track Your Daily Expenses

Along with your expense budget tracker is your daily expense sheet. The daily expense sheet will itemize or record all the day-to-day expenses you incur from Monday to Sunday.

Calculate the total amount of the expenses and record them in the “Actual” column of the expense budget tracker. Do this process every week and match it against your allocated budget.

As a result, you will see how your daily spending affects your allocated expense budget. You can also plan for the expenses you don’t need and cut them back.


Track Your Daily Expense Financial Planning
Track your expenses daily on your daily expense sheet from Monday to Sunday and record them in the expense budget tracker “Actual” column.

5. Track Your Income

In financial planning, it is vital to track all the cash inflows, the money in your bank, and the income you earn from work or other sources.

By tracking all the income in your household, you will have a better idea of the amount of money you have on hand, which will help you plan and allocate all your payments properly.

On the other hand, if you get paid bi-weekly, you can write down your payment amount in the column of income details.

Similarly, you can also record the amount you earn from your side hustles under the business column and other sources like writing a script, delivering food, and others.

For your business and other sources of income, you can specify some details found at the bottom of the columns. You will measure all these sources of income by deducting all your bills and payments.

Furthermore, you will deduct all the payments from your total income. At the bottom of the page, you will determine if your income covers all the deductibles while giving you excess savings.

Nonetheless, this tracker will also help you develop a good plan to resolve your financial issues versus your payments and could be the basis for your financial objectives for the following month.


Track Your Income Financial Planning
Tracking all your bills and payments is not enough if you have no clue how much money goes to your bank. That is why it is vital to track your income and other resources in financial planning.

6. Track Your Emergency Expenses

We all have some emergency expenses. It could be a flat tire that needs a replacement, a busted bulb, or another. These unprecedented expenditures do not fall into our essential expenses like food.

It is undeniably part of financial planning to track emergency expenses. If not anticipated and included in the budget, an emergency expense could take the whole amount of your allocated money for other payments.

The Emergency Expense Tracker will record the following:

  • The total amount of the expenses
  • The reason for the emergency
  • The emergency expense date
  • How often or frequently the spending occurs is


Track Your Emergency Expense Financial Planning
The financial planning for your emergency expenses will monitor the details of unprecedented costs.

7. Track Your Savings

Another vital step in planning your finances is tracking your savings. It is essential to accumulate money for your rainy days. However, it could be a challenging process if you are currently fixing your finances.

Significantly, a savings tracker is a great planner to record your monthly withdrawal and deposit transactions. You can also note the reason for withdrawal track the remaining balance and transaction date.

Additionally, you can also point out in the note section if you hit your savings goal or not.


Track Your Savings Financial Planning
Tracking your savings is equally as significant as monitoring your payments.

8. Track Your Financial Goals: Financial Planning Overview

Financial planning, tracking your financial goal, is a summary or compilation of your total income, the actual amount of your monthly debt and bill payments, regular expenses, and emergency expenses for the month.

You will write the following In the actual amount column:

A. Debt

The total amount of debt you will pay monthly. You can find your total amount of payments on the Debt Tracker.

B. Bills

This section will calculate the total amount of bills you will pay each month. You can find your bill amount details on the Bill Tracker list.

C. Expenses

  • This is the total amount you spend in “ACTUAL” as recorded by your Expense Budget Tracker. You will total all the “actual” expenses from week 1 (W-1) to week 5 (W-5).
  • Add the total amount of your debts, bills, expenses, and emergency expenses (if there are any).
  • Deduct the amount of total income from the total amount of actual payments (debts, bills, expenses, emergency expenses).

The net of your income will determine if you are doing good on your finances or not.

If you have any excess of your income after all the deductions, it is undoubtedly a clear indication that you can still utilize this money and put it in your savings.

Savings should be part of your financial goal before all the deductions but, if you are in the process of fixing your finances, it is awkward to say that savings may not be a priority for the time being.

However, suppose you completed the payment of one of your significant debts.

In that case, you can either allocate your regular savings budget monthly or choose to pay the other debts faster by paying more than the minimum amount.

At the bottom part of the Financial Goal Tracker, you will measure your financial score on:

  • How well do you do each month financially
  • What part of your finances needs work
  • What part of your finances can you control and minimize to allocate your income properly

In addition, if you spend more than you allocate in your expense budget, you may need to evaluate the expenses that are not necessary and eliminate them from your lists. More importantly, cancel a subscription that does not impact your immediate needs.


Track Your Financial Goal, Financial Planning Overview
A financial goal tracker is a crucial piece of financial planning because it can measure if you are doing well or not in your finances.

9. Determine Your Financial Objectives

After you track your financial goals, it is imperative in financial planning to determine your financial objectives.

What is the financial objective?

A financial objective is your goal for monetary growth and development in your income, savings, debts, expenses, and others. It is a specific and realistic goal and target that you want to achieve in a certain period.

I created this planner as part of my Ultimate Financial Planning to set monthly goals based on the monthly performance and flow of finances from the current month.

Nevertheless, You will determine the financial objective before the following month’s cycle begin. Your goal will signify how you can improve all the aspects of your finances and find a resolution based on occurring issues of the month.


Determine Your Financial Objectives financial planning
Without a doubt, a Financial Objective Planner is a valuable tool in your planning for the following month.

10. Track All Your Payments Schedule In Calendar

The purpose of the payment calendar in financial planning is to track the summary of your payments for the whole month’s worth. You can fill in the specific debts and bills’ due dates with this particular calendar.

Indeed, you can easily hang this tracker on your reminder board, refrigerator door, or in your binder to keep you updated on your obligations each day.

Furthermore, you can write down paid bills and debts on the right side of this tracker and highlight the paid ones as you wish.


Track All Your Payments Schedule In Calendar financial planning

In conclusion, these ten planning steps will give you a good start organizing your finances. Thus, incorporating the step-by-step guide will require a constant habit of tracking and monitoring these planners.

In summary, the ten valuable planners needed in your planning are:

  1. Bill Tracker
  2. Debt Tracker
  3. Expense Budget
  4. Daily Expense Sheet
  5. Income Planner
  6. Emergency expense
  7. Savings Tracker
  8. Financial Goal
  9. Financial Objectives
  10. Payment Schedule: Calendar


Lastly, If you commit yourself enough, especially to a better financial situation, your dedication to implementing the ultimate guide is highly needed; otherwise, it will not transform into a desirable result.

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