There are so many people who wanted to do something new in their lives but believed they didn’t have the funds for it. You can have a great concept, a business plan or investment idea, but not enough money to pursue it. Most of those ideas just disappear after a while. You give up on them and get back to your old, established ways.
What happens if you actually go for it? It’s true you can’t just wing it. But, you could take some additional steps to find out what it takes for you to achieve your goals. Money is always the biggest issue. Funding your project can be tough but you need to make sure you’ve got the numbers right. This is why before starting a new project you need to know exactly how much money you need to fund it. Let’s take a look at how you can get a hold of your finances.
How Much Do You Have?
Before making a move with your money, you need to know how much have you already got.
“You wouldn’t believe how many people have no idea what their actual monthly income is! They earn and they spend without having the idea of the actual number. Unbelievable.” - says Amanda Sparks, an economist and a writer at TopDownWriter.
You have to know the exact amount of money that you earn on a monthly basis.
Make sure to consider all sources of income:
- part-time jobs
Your monthly income and your current savings will determine your current financial situation. Once you know where you stand, you can make the next move.
How Much Do You Spend?
Oscar Manning, a financial analyst and an editor at Canada-Writers points out the following: “You probably think you know exactly where your money goes. But, you might be surprised by what you find out after giving it a second look.”
It’s time for your long-term expenditure planner. This is where you enlist all the things you regularly spend your money on.
Make sure to write down the money you spend on:
- medical health
Another thing you need to consider is irregular expenses coming your way during the period of funding your goals. Think in terms of:
- family wedding
- house maintenance
- car registration
- similar expenditures
Make sure to plan your expenses and have an undeniably clear picture of where your money goes and might go.
What Is your Goal?
This is one of the major steps: defining your goal.
What do you want to achieve? Do you have a carefully planned out vision?
“You can’t start anything serious if you’re not absolutely certain about your idea. Once you know what you want, you can start working on it” - says Jessica Fender, a psychologist and a writer at OnlineWritersRating.
This phase requires detailed planning, developing the idea and bringing it to its final form. That includes:
- the time frame
- the procedure, step by step
- possible partners
- your role
- best and worst case scenarios
You need to define and outline everything. Once you do it, you can actually start considering the financial aspect.
How Much Do You Need?
Every phase of your previously determined plan is going to imply spending a certain amount of money. You need to know exactly how much money do you need.
This phase requires a lot of phone calls, emails, online searches and asking around.
- There are people who offer the same services but charge differently.
- There are different solutions to one problem.
- There are better and worse options.
This is the phase of decision making.
James Daily, an editor for Brainished says planning is key: “Every investment requires planning. There’s no room for being spontaneous.”
Knowing exactly how much you need is key.
Do The Math
You know how much you have, earn, spend and need.
Now you need to combine those 4 figures.
How can you combine them? Let’s take a look:
- Money to be earned and spent in that period
- Money to be invested
“Calculate how much money will you have by the end of the time frame. Will you have enough? How much more do you need?” - asks Jason Dolan, an economic consultant and a writer for BestWritersCanada.
What you just did, is you created your financial plan. It’s that simple.
Now you need to deal with the funding. If your goals are beyond your budget, you need to consider a loan.
If you calculated the exact amount of money you need to fund your goals, you need to deal with the budget.
Where can you get the money?
These are your options:
- a business-loan
- an investor
- a personal loan
“Personal loans are not always the best options. There’s a reason why you shouldn’t mix money and friendship” - explains Maria Stinson, a journalist and a writer for TopAustraliaWriters.
You have to make this final decision and do what you think is best for you. Do your research and determine what’s best.
The only recipe for a smart investment which will generate future income is to know your numbers. Calculating and determining every step you take will lead to wise choices and reasonable funding.
We’ve given you advice on how to handle your finances and determine the amount you need for your goal. Now you need to sit down and start planning. Do your homework and rest assured that achieving your goals will be closer than ever.