Thursday, September 18, 2008

Be Your own financial planner part 6 - Be flexible

Congratulations, you are well on your way to being your own financial planner.  You have already made a plan to:
  1. Purchase adequate life insurance for you and your family
  2. Establish an appropriate emergency fund
  3. Track where your money comes from and were it goes
  4. Pay off your debt
  5. Save for retirement, and
  6. Prepare for other major financial events
However, your financial planning is not coming to an end, it is just beginning.  As time goes on, your situation will change.  The market will go up and down, you will move, lose your job, get a raise, have kids, buy a new house, and change your goals.

Therefore, your financial plan will need to be updated over time.  I would recommend that you re-examine your goals and make sure that you are on target at least once every two years.  If you prefer, you can do it once a year.

The final step in creating your financial plan is to remember to be flexible and to regularly reassess your plan.  Your situation and your goals will change over time.  An outdated plan won't do you much good.  So, every year or two, go through steps 1 - 6 again.  You might find that you don't need to make any changes.  But it is always worthwhile to ensure that you are still on target.  Good luck!

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