One of the best tips for personal finance planning is found right in the term: planning. People who are most successful at personal finance take time to plan for the distant future, as well as budgeting the amount of money they are making and spending in the immediacy. Creating a personal budget and then sticking to it is one of the simplest and best methods of personal finance planning.
To begin creating a budget for personal finance planning, it is a good idea to keep all receipts for a month or two, make note of utilities or other bills paid, and write down all cash transactions. The idea behind this is to see exactly where one's money goes each month. Then, compile all the receipts and split them into categories, such as utilities, household expenses, and entertainment expenses, to name a few. Chances are, there will be some areas where spending can be cut in order to save money, and even if there are no obvious places to cut spending, at least a clear picture of income and expenditures will be available so that priorities may be established.
When creating a budget, determining acceptable amounts for expenditures in each category is a good place to begin. Then simply see if it is possible to stick to those categories. Personal finance planning also involves setting goals for the future; these goals may be relatively immediate, such as paying off credit card debt or saving up a down payment for a new car. They may also be more long term, such as saving for a down payment for a house, or putting money aside in a retirement account or for an emergency fund.
Many people choose to create separate categories in the budget for these short term and long term financial goals. Others will simply siphon money out of a checking account and into savings accounts each month, which can be beneficial because the money can then grow interest. Personal finance planning will often include investments as well, which may be an additional retirement account, investment in stocks, bonds, or life insurance policies, to name a few, as well as real estate investments.
Some people find that they are able to do personal finance planning independently, such as by creating a spreadsheet on a computer, or even simply using a notebook. Others will use personal financial planning software, or websites that keep track of income, expenses, and financial goals. Others will hire financial advisors or accountants to manage more extensive finances. Any of these methods can be very effective.