How to use the action plan to achieve financial goals?

Discover how to use an action plan to achieve financial goals

Did you know that you can use an action plan to achieve financial goals?

In fact, to be financially successful and achieve your goals, it is essential to have a lot of planning and organization.

The search for financial freedom can be enhanced with actions, techniques and tools that optimize and help organize your finances.

And if you want to find out how to put together an action plan to set goals and objectives, keep reading. We’ll explain how it all works.

What is an action plan?

Before showing you how this tool can help you economically, we need to explain what this concept means in practice.

Well, one action plan It is an organized way that follows a methodology to establish objectives and tasks that must be carried out, as this makes it easier to obtain good results.

In short, it is a document used to plan the necessary work.

This can be applied to both personal and professional life.

In general, a good activity plan should analyze the following factors:

• General objectives to be achieved with the plan

• List of tasks to be performed

• Definition of deadlines

• Risks involved

5W2H Action Plan

The 5W2H tool is a set of questions that helps you put together an action plan to achieve financial goals more quickly, practically and efficiently.

The acronym is formed by the initials, in English, of the seven guidelines, which, when established objectively, facilitate the entire process and eliminate doubts that may arise.

With each goal you set, you need to identify and answer these questions:

The 5W:

• What: what do you want to do?

• Why: Why are you going to take this action?

• Where: Where will this be done?

• When: When will this be done?

• Who: Who needs to be involved to achieve this goal?

The 2H:

• How: How will this be done?

• How much: how much or what resources are needed?

What are the main types of financial goals?

There are several types of objectives that vary according to the established deadline, which can be short, medium or long term.

Here are some examples:

• Pay off a debt

• Buy a new cell phone

• Renovate the house

• Take a trip abroad

• Buy a car

• Buying a house

• Achieve financial independence

• Set up your own business

• Start a new undergraduate or graduate degree

• Retire with a passive income

How to put together an action plan to achieve financial goals?

The financial plan is something personal, that is, you need to analyze your financial reality and your goals.

This way, you will be able to carry out your planning more easily and clearly.

All of this will become clearer after this step-by-step guide:

Understand your financial reality

The first step to planning is to understand your financial reality.

To establish goals and develop financial control, you need to understand exactly what your main expenses and earnings are.

In your planning, you must include all your income, expenses, debts (if you have any), investments you have, among others.

Centralizing this information is a way to see your current financial situation more clearly and, therefore, discover if there are harmful expenses that can be eliminated.

Set goals and objectives

Each person has their own goals and objectives.

And you must define what you really want to achieve, whether in the short or long term, so that you can think of possible strategies that can be put into practice.

In other words, you need to put your current and future desires on paper (or in an Excel spreadsheet).

To help you, let's give an example.

Imagine you want to take a trip to the United States two years from now.

To achieve this objective, it is necessary to understand all the “smaller goals”, which undoubtedly affect the final result.

To plan this trip, you need to think about several things, such as:

• Visa and passport

• Airline tickets

• Hotel reservation

• Amount needed for local expenses (transportation, food, shopping)

• Travel insurance

• Unforeseen events that may arise

Set deadlines

Financial goals need deadlines to be achieved.

This way, it becomes easier to maintain the determination, focus and discipline to achieve them.

Therefore, when determining a specific objective, evaluate how much time is needed to achieve it.

This includes factors such as your current financial situation, how much you can save each month, what are the best investments to make, etc.

Adjust your habits to create an action plan and achieve financial goals

When thinking about financial goals, you can analyze the need to cut expenses and change some consumption habits.

This transformation begins by abandoning certain habits that may be taking your money away and preventing you from achieving more important goals.

Consider possible unforeseen events

Unforeseen events can arise at any time.

Therefore, they need to be considered in your planning.

In any case, they can be minimized if you have an emergency fund or a plan B.

Think about other sources of income

It is important that you look for a source of extra income, that is not linked to your main activity.

This way, you will optimize your earnings and have greater protection in the event of any financial unforeseen events.

Examples of extra income:

• Resell imported products

• Application driver

• Working in restaurants

• Work at events

• Give private lessons

• Answer surveys

• Rent out your car to make money

• Sell credit card miles

Monitor your financial control

The planning must be reviewed throughout the entire route.

If you notice that something is not going as planned, it is time to think about new strategies.

In fact, if something unexpected happens, you will probably have to rethink some of your goals and actions!

Conclusion

Putting together an action plan to achieve financial goals is important for analyzing your current financial situation, setting goals and defining deadlines.

This way, you increase control and organization of your finances, which is very important for you to achieve your goals.

We hope this article helps you plan more and more!