A Beginner’s Guide to Creating a Financial Plan



As a skilled tradesperson, creating a financial plan may not seem like the most exciting task, especially when there are so many other things to worry about. However, it is an essential step towards achieving long-term financial security and stability.

In this beginner’s guide, we’ll outline the key steps to take when creating a financial plan in the skilled trades. We’ll also provide you with some verified facts and figures that can help you make informed decisions and build a solid financial foundation for your future.

Step 1: Assess Your Current Financial Situation

Before you can begin to create a financial plan, you need to get a clear picture of where you stand financially. This means taking stock of your income, expenses, assets, and liabilities. You can use online tools or financial planners to help you track your spending and debt, but ultimately, you’ll need to sit down and do some math.

According to a recent survey, only 33% of Americans have a detailed household budget that includes all monthly bills, expenses, and income. This means the majority of people are living paycheck to paycheck and are not prepared for unexpected expenses or emergencies.

If you’re among the 67% of Americans without a budget, don’t worry – you’re not alone. The first step is to track your expenses for a few months to get an idea of where your money is going. From there, you can begin to create a budget and identify areas where you can cut back on spending.

Step 2: Set Financial Goals

Now that you’ve assessed your current financial situation, it’s time to set some long-term financial goals. These might include paying off debt, saving for a down payment on a house, or building up an emergency fund.

According to a recent survey, only 18% of Americans have enough saved to cover six months of expenses in case of an emergency. This means that the majority of people are one unexpected expense away from financial hardship.

When setting financial goals, it’s important to make them specific, measurable, and achievable. For example, instead of setting a vague goal to “save money,” set a specific goal to save $500 per month towards your emergency fund.

Step 3: Create a Plan to Reach Your Goals

Now that you’ve set some financial goals, it’s time to create a plan to reach them. This might involve cutting back on unnecessary expenses, increasing your income, or finding ways to save on the things you already buy.

According to a recent survey, the average American spends over $5,000 per year on unnecessary expenses like coffee, dining out, and subscription services. By cutting back on these expenses, you can free up money to put towards your financial goals.

Another way to reach your financial goals is to increase your income. This might involve working overtime, taking on side jobs, or investing in your skills and education to increase your earning potential.

Step 4: Monitor Your Progress and Adjust Your Plan

Creating a financial plan is not a one-time task. It’s important to monitor your progress regularly and adjust your plan as needed to stay on track. This might involve reassessing your budget and expenses, increasing your savings rate, or changing your investment strategy.

According to a recent survey, only 46% of Americans feel confident in their ability to manage their finances. By regularly monitoring your progress and making adjustments as needed, you can increase your financial confidence and build a solid financial foundation for your future.

Bottom Line

Creating a financial plan may not be the most exciting task, but it is an essential step towards achieving long-term financial security and stability. By assessing your current financial situation, setting financial goals, creating a plan to reach those goals, and monitoring your progress regularly, you can build a solid financial foundation and increase your financial confidence. Remember to seek out resources and professional advice if needed to help you make informed decisions and achieve your financial goals.

Photo of the Remarkables mountain range in Queenstown, New Zealand.
Photo of the Remarkables mountain range in Queenstown, New Zealand.

> For one on one or group assistance with personal finance, STR recommends that you check out the following resources:

Mappedoutmoney.com

Ramseysolutions.com

> Inaccuracies with Bureau of Labor Statistics (BLS) data: Many of our blog posts will quote BLS data. SkilledTradeRescue.com has been able to identify that data quoted specifically for Skilled Trades can be as much as 50% LOW in many USA labor markets. For more information on these inaccuracies please visit the STR national labor survey page at the link below. On this page there is a video containing the latest information at the top of the page as well as other information. If you currently work in skilled trades, PLEASE consider participating in our national labor survey.

CLICK HERE for more Information

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