This article helps you out with the contrary aspect of mainstream financial Planning, i.e. DIY Financial Planning.

As the financial planning service is gaining a lot of popularity, you might think everyone needs to hire one. 

Well, no doubt there are a plethora of financial advisors available out there, including the Robo advisors. The answer to your dilemma is that it is not necessary for you to hire a professional. 

On the other hand, you can plan your finances all by yourself with a little bit of intelligence, time, and effort.

After all, no one works for free, so you also have to pay some fees when you hire a professional. 


Are you ready to make a DIY Financial Plan?

Often, people have to possess the skill and drive to plan their finances effectively. Some of the criteria you need to meet if you want to plan the finances all by yourself are.

You enjoy and have some interest in learning about the financial topics

The topics can be anything like taxes, loans, and personal finance. You can read a plethora of books, courses, and resources that you can take up to get updates on personal finance.

Additionally, this is an ideal choice for you if you have a lot to invest in learning, and you like this topic.

You can invest time to review your current status

You can indeed make and manage your financial plan if you are perfect at keeping track of your income and expenses.

Besides tracking your finances, you also need to save them. Above all, you can say you are making wise financial decisions if you are able to manage your debt correctly.

Comfortable making financial decisions

Besides being pleased with decision making, you also need to be confident about your retirement plans  in DIY Financial Planning.

It is quite possible that you don’t have a lot of money now, but at the same time, it is not impossible to have a six-figure balance too.

When you save and invest regularly, you can indeed accumulate a lot of wealth. You don’t need an expert if you feel comfortable managing a considerable sum of money.

Additionally, you can always change your decision and hire a professional if you think the amount is too huge. 

There is no need for financial hand-holding

In simple terms, DIY Financial Planning means you are okay with market volatility, and also, you can take the ups and downs of the market quickly.

It is essential to be comfortable watching your own portfolio if you are your own financial advisor.

You won’t feel compelled at all if you get accustomed to the market volatility, and then you can be your advisor.

Before you become your financial advisor, you need to learn some basics.


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    Things to know about Financial Planning

    A financial plan is ideally a big picture of your current financial situation, your strategies, and goals which you plan to achieve. 

    DIY Financial PlanningIf you want to make a sound financial plan, then you must include debt, investments, cash flows, and savings. 

    You need to know that financial planning is a continuous process that will minimize your stress about money and serve your needs. 

    It will help you in creating a nest egg for your long-term goals, including retirement.

    Additionally, financial planning is crucial because it allows you to make the maximum out of your investments. 

    Above all, you can surely meet your financial goals with financial planning. You need to remember that financial planning is not only for financially well to do people but for everyone. 

    In simple terms, the main agenda of a financial plan is to create a roadmap for people. 


    DIY Financial Planning – Step by Step Guide

    Here is the beginners guide to DIY Financial Planning –

    Write down your Goals – Step 1 in DIY Financial Planning

    If you want to achieve something, then you can’t miss out on this. When you write something down, you automatically feel motivated to achieve that thing.

    It gets an imprint in your mind. The first thing any expert will ask is you is that what you want to accomplish with your money.

    Hence you must also ask yourself this question. It is quite simple. All you need to do is envision yourself a few years down the line.

    No doubt you can easily talk about goals in general, but the main catch is to write them down.

    Plans tend to motivate you more if you identify your goals specifically and also look into your financial goals.

    Hence it is always a good idea to be clear on what you want to do with your hard-earned money. Thus, if you don’t like to write it down physically, you can choose some apps.

    Build a Net Worth Statement – Step 2 in DIY Financial Plan

    When it comes to achieving your goals, you need to determine your current status. Hence you need to start right now.

    First of all, you need to start by making a list of your assets, including your bank and investment accounts.

    Post then, you need to make a list of all the debts, mortgages, loans, etc. You can calculate your net worth by subtracting your assets from your liabilities.

    Then you need to list down your debts like credit cards, loans, etc. You are doing great if you are in the plus.

    For those who are starting out now, you don’t need to stress even if you are in the minus. All you need to do is work on it and come on the plus side.

    Irrespective of what you do, you need to make it a benchmark against which you can measure your results.

    Review your Cash Flow – Step 3 in DIY Financial Planning

    In simple terms, cash flow money present in your income and expenses. You need to ensure that you count all your income sources.

    Then you need to look at how much you spend. You need to add even the rarest of your expenses.

    Ask yourself if you overspend consistently, how much do you save? Etc. The answers to these questions will surely make your financial planning easy.

    Zero in your Budget – Step 4 in Do It Yourself Financial Planning

    You will know what you are actually spending when you take a review of your cash flow. In simple terms, zeroing allows you to see how much you end up spending.

    All you need to do is write down your financial expenses, including insurance, mortgage, transportation, food, etc.

    Additionally, ensure that you don’t skip out on essential items like a car repair. Also, ask yourself if savings are a part of your budget or no.

    When you are building an emergency fund, you can examine your expenses, which will help you with the store. It will help you in understanding if you are spending as per your goals or no.

    You need to know that nothing will work if life plans to throw a curveball no matter what kind of planning you do.

    Here is where the emergency fund comes into the picture. Hence always create an emergency fund so you can match any situation.

    Don’t forget the Debts – Step 5 in DIY Financial Planning

    No doubt, not all debts are bad, but at the same time, debt can derail you. Debts, including mortgages, can indeed work in your favor if you don’t choose to extend it.

    You need to avoid high-interest debt, including credit cards. Experts suggest that people must follow the 28/36 guidelines, where only 28 percent of the income goes to debt.

    Hence you can just look at all the debts and plan how you will pay them on time.

    Think about your Retirement Savings – Step 6 in DIY Financial Plan

    Irrespective of what age you are in; retirement savings just cannot be out of your financial plan. You will have to save less each year if you start early.

    When it comes to healthcare costs, you will be astonished to know how much you need.

    So experts suggest that you start early so you can accumulate a significant amount of wealth till the time you retire.

    Start with small savings, and then you can slowly increase your savings when your income increases. No matter what you do, just don’t stop saving.

    Ensure you have the right Insurance – Step 7 in DIY Financial Planning

    One of the most important aspects of protecting your finances is having adequate insurance. You need to have disability insurance so you can protect your future earnings and also save.

    Additionally, if you have dependents, then you must consider having life insurance. Above all, you must regularly review your policies to ensure that you have the right type of policy.

    Build an Estate Plan – Step 8 in DIY Financial Planning

    At a bare minimum level, you need to have a will in your minor child’s name. Also, ensure all the beneficiaries of your investment are perfect.

    You can also consider working with an estate planning attorney as they can help you with some complex process also. 


    DIY Financial Planning – Conclusion

    You need to know that money management or investment is not at all rocket science. You can easily do it by following these tips. All you need to do is put in some time and effort. 

    You need to learn some basics of investing and planning and remain consistent with your goals. 

    Don’t stress, slowly and gradually; you will surely achieve your goals because hard work pays off sooner or later. 


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