Preparing your financial plan

Article last updated: 20/05/09

Step 1 - Identify your financial goals
The first step is to establish your financial goals. What would you like to achieve, do and buy in the longer term? Carefully consider your financial goals and list them in order of importance. For example, buying a more reliable car, having X amount of money in the bank and having a healthy family.

Rank your goals
Take the first two goals and decide if you can only have one of these, which one is more important and put a tick next to it. Repeat this process for the third and fourth and so forth for each of your goals. Once you have compared every goal then count up the ticks and rearrange your life goals in order of their importance to you. As most people cannot afford all the goals on their list, you now know what to give priority to and what you can potentially sacrifice.

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Step 2 - Identify your current financial situation
Now that you have listed your goals, you need to establish a clear picture of your current financial situation. Use the table below to record the dollar value of your income, assets and liabilities.

Your income

Your salary

Your partner’s salary

Your investments

Total

Your assets

Shares

House

Investment property

Managed funds

Car

Other

Total

Your superannuation

Yours

Your partner’s

Total

Your debts

Mortgage(s)

Credit cards

Shares loan

Managed funds loan

Car loan or lease

Other loans

Total

Step 3 - What might prevent you from reaching your financial goals?
The next step is to consider what could prevent you from attaining your financial ambitions – these are known as risks. List the risks you believe could threaten your financial goals, in order of the likelihood of them happening. For example, unexpected expenses, illness

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6. Procrastination. It is never too soon to prepare yourself before it is too late.