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Money Basics
The first steps to your financial plan

The first steps to your financial plan

Often, you do not really know where to start and quickly lose your boldness. But that does not have to be.

Here I have put together a step-by-step guide with the basics to help you get a better overview, to less worry about your finances, and even save some money in the end. Let's start right now!


Step 1: Define your goals.


To create a plan that works, you first need to be aware of what you want to achieve. Start by making a list of the goals you want to achieve with your money over the next five years.


Do you want to pay off your debts? Buy a new car? Be better prepared for emergencies? The more clearly you can phrase your goals, the easier it will be for you to make your plan.


After defining your goals, order them in their order of importance. This is especially important to help you become aware of what to focus on in the case of doubt.


Step 2: Check your expenses.


However, before you spend too much time daydreaming about your exciting goals, you should first be aware of where your money is actually going - and how much you have left after all the bills are paid.


With free apps like Zuper, you can instantly see in which categories you are spending your money and where you have room for improvement without much effort. Alternatively, you can also take a piece of paper and a pen and make a note of your expenses by hand.


The biggest benefit of this exercise is that you can immediately see where your money is actually going. There is a good chance that you spend significantly more on food than you thought, when it comes to smaller things like snacks or other impulse purchases. Once you realize where your money is going, it's easier to figure out where to save some money. This is especially important for the next step!


Step 3: Pay off your debts.


If you owe money, your priority should be to pay it off. Ideally, you can use the money you found in step 2. Prioritize your debts and start with those who have the highest interest payments. Here I show you how to pay off your debts easily. 


Step 4: Build up savings.


Once you have paid off your debts, it's time to save something. The most important thing is to just start. Set up a standing order to regularly transfer a certain amount of money on a designated account or on a savings account.


Do not wait until the end of the month to save the money that is left over until then -  the chances are great you'll never do that. Also consider that not every account matches every savings goal. If you want to build an emergency fund first, it makes sense to keep this money on a standard savings account that you can access at any time in well an emergency.


For long-term savings goals, on the other hand, it may be worth to open a long term savings account with better interest rates. Whatever type of account you choose, it's worth comparing! Use comparison portals or ask different banks to find the best conditions for your needs. 



Here is our Beginner Guide on how to start saving money.


Step 5: Don’t take risks. 


Pay attention to your insurance. By law, you must have liability insurance for your car and your mortgage lender will ask you to have building insurance.


You do not necessarily  need a householder’s insurance policy, but it can be useful. Similarly, a disability insurance is recommended to provide you with financial security even in the event of incapacity for work.

Another form of insurance that is often overlooked or forgotten is life insurance. Not everyone needs it, but you should have one, if other people depend on you and your income, because you have a common mortgage or you have children. Contact an independent insurance consultant to find the best deals for you.


Step 6: Breathe.


Start with the points above and you will soon have more control over your financial situation. The important thing is that you start with a precise plan, where you can see every step clearly and work them off step by step. It's up to you where you set your priorities.

Leitha Matz
FinTech COO. Startup Mentor. Woman in Tech. I spend a lot of time thinking about technology products and user experience, and I love stupid puns.
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