Life is full of both opportunities and hazards, which are hardly controllable. What can be controlled is the way you take advantage of opportunities and anticipate the problems.

Financial planning helps you get a firmer grip on taking advantage of such opportunities and anticipating problems. This is true whether you are fresh out of college, in the prime of your career, or approaching retirement.

There is a seven-step guide to putting your personal finances in order. These are:

§          Determine your current financial situation: Where are you now financially? You can calculate your net worth by getting the difference between the market value of your assets (i.e., house, car, time deposits, loans to relatives, etc.) and your liabilities (loans from relatives and financial institutions, taxes payable, credit-card debts, etc.).

§          Set your financial goals: Goals do not have to be comprehensive as long as they suit your needs.

§          Develop a plan: The plan will transform your goals into actions. You can categorize them into short-, intermediate- and long-term plans.

§          Keep financial records: Records will help you track expenses for tax purposes, particularly for the self-employed, and will enable you to quickly know how, where and how fast you are spending your money.

§          Make a budget: The keys to success for keeping within the budget are accuracy of record keeping, consistency of effort and discipline in curtailing expenditures. In budgeting, the ideal situation is to budget your savings first before budgeting expenses. Ideally, you should have six times the amount of your monthly income in savings at any given time (i.e., should you lose your current job, your savings will allow you to survive for six months while looking for another job).

§          Address shortfalls, credit and debt: Pay down and avoid potentially problematic debts arising from credit cards, car purchases, impulsive and compulsive spending and “keeping up with the Joneses” while simultaneously saving little by little.

§          Monitor your progress: Check if you are making progress by reviewing your investment records, your budget and your net-worth statement regularly. Many times, you will see that your savings will fall short of your goals. Under these situations, you may want to consider “turbo-charging” your savings through investments.

For some, even these seven steps may prove daunting. Do not fret. There is a group of individuals known as registered financial planners (RFP®s) who can lend a helping hand. The RFP® designation is granted by the Registered Financial Planner Institute of the United States of America. The RFP® mark helps people recognize financial planners who are dedicated to professional and ethical behavior when providing financial-planning service.

The RFP® has a list of its members on its web site (www.rfp-philippines.com). To get contact details of any of the RFP® members, just send an e-mail to info@rfp-philippines.com.

There has also been a rise in personal finance news, sites and blogs, as well as books on the topic. Among the popular blogs and web sites are Money Smarts by Salve Duplito on Inquirer.net (http://blogs.inquirer.net/moneysmarts/) and Income Tacts (www.income-tacts.com), one of the country’s fastest-growing personal finance-discussion groups. The web site is owned by the Personal Finance Advisers Philippines Corp.

Among the more popular personal finance books and magazines authored and/or published by Filipinos are Pwede Na! The Complete Pinoy Guide to Personal Finance; Pwede Na! The Complete Pinoy Guide to Retirement and Estate Planning; 10 Sikreto ng mga Mayayaman; Philippine Taxation Handbook; Pera Mo Palaguin Mo 1 & 2; Think Rich Pinoy; and MoneySense Magazine.

With the above resources, there is really no reason to delay personal financial planning. And you better start early because if there is one thing that does not wait, it is Time.

Henry Ong, RFP® is the founder of Registered Financial Planner Institute of USA Philippine Chapter and chairman of the Association of RFP®s in the Philippines. Comments and questions about the article and other queries may be e-mailed to hong@businesssense.com.ph

Join the 12th RFP Program from September 27 to November 29 at the Crowne Plaza Galleria. For more details, please visit www.rfp-philippines.com or inquire at info@rfp-philippines.com, or call +632-634-2204

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Life is full of both opportunities and hazards, which are hardly controllable. What can be controlled is the way you take advantage of opportunities and anticipate the problems.