Spend Time Instead of Money: Set Your Future in Stone with a Financial Plan

It's easy to meander through life without any real goals. Lots of people do that. The problem is that a lot of people are also in financial trouble. It's no coincidence that poor financial planning is associated with a lack of financial success. Without goals, and a plan, you're just daydreaming about the life you could have. Don't dream, achieve.

Set An Overall Purpose

The first thing you should do is lay down a purpose for having a financial plan. A financial purpose could be anything, but usually involves some type of productive activity. Maybe you enjoy working at your current job. Is there room for advancement? If you hate your job, why are you still there? Should you be making a plan to switch jobs or start your own business?

Write down what you really want to do in life. Write down that one thing you could do forever, even if you had to do it for free - that one thing that you love doing even on the weekends. Your job shouldn't feel like a job. It should be fun. Sure, you're going to get tired, and you'll need a vacation, but you shouldn't be longing for the weekend and retirement.

Of course, there are other things in life unrelated to work. These could be hobbies or favorite vacations you enjoy taking every year. Make sure you write these down too.

Set Long-Term Financial Goals

Open up your favorite spreadsheet program. Once you have a long-term purpose set in place, it's time to enter in all of the information that will get you moving toward that purpose. It might even be helpful to write down your purpose in the spreadsheet.

Long-term goals are things you expect to happen over a period of 5, 10, 20, even 30 years. These might be things like buying a home, starting a family, buying a business or starting your own, moving out of the country, or retiring.

Set Short-Term Financial Goals

Once you have long-term goals set, it's time to reverse-engineer short-term goals. Short-term goals typically are derived from long-term goals. For example, let's say one of your long-term goals is to own a home. How will you get there?

Well, you might need a lot of short-term goals like "find a new job," "start a savings," and "buy life insurance." If your long-term goals involve building the home of your dreams, your short-term goals would also include "research construction companies," "hire an architect," and "build good credit for a construction loan."

Buy Financial Products

Usually, people rush into buying financial products before they ever have anything resembling a plan - big mistake. Fortunately, companies, such as jg wentworth, can help simplify the process of buying financial products. They can also buy back retirement plan payments later on in life if your plans change and you end up needing a lump-sum of cash in your old age.

Life insurance, annuities, mutual funds, stocks, real estate - all of these things are merely an implementation of a plan. Once you know what you want to do, choosing the right financial products is easy.

Update Your Plan Often

Plans change. Life happens. If something goes awry, you need to be prepared. That's why a good plan is always open to change. Review and update your plan once a year. If you unexpectedly have a child before you're financially ready, some long-term plans might need to be shuffled around. At the end of the day, your plan isn't going to be set in stone. It's a useful guide, but it's not something that should feel like a duty.

Melissa Rudd is a long time accountant and avid blogger. You can find her helpful writings on many blogs, including finance, business, technology and more.