While you may not think that you need a personal financial management plan, you may be surprised by how much it can help. And for those that are uncomfortable and unsure of their ability or knowledge on the subject, set your fears aside and realize that it is simple math that can help create the future that you desire. It doesn’t have to be hard to come up with a personal financial management plan but you do need to take some time to make it happen.

To start with, determine how much money you have coming in. Then determine all of your expenses, yes, all of them. That means figuring out the lattes and espressos as well. Make sure that you add in any gift money or refunds that you may be getting as well into your income. Once you both figures, subtract expenses from income. If you are lucky, you are in the plus side. For those with a negative result it is time to determine ways to increase the income as well as decrease expenses until you are at least at break even. Once you have reached that point you can then move on to the next steps of creating a successful personal financial management plan.

At this point it is time to examine any current debt outstanding. Starting with credit cards, are you able to pay them off in full each month? If not, do you have the additional funds to do it now? Another option is to see if you can lower the interest rates on your cards. Interest rates range from almost 0% to 25% these days. And some may go higher. By dropping your rates as low as possible you can take the savings in interest payments and put it toward the principal. That helps lower the number of months it takes to eliminate your total credit card balances. And once that happens, it should be your goal to never have another credit card balance that can not be paid off each month.

Once you have taken care of credit cards, move on and look at any other debt that you might have as well. For example, are mortgage or car interest rates lower than when you took your loans out? Then a refinance may be a viable option that will allow you to either pay down more principal each month or use those funds for other investments. Why pay more in interest that you need to on any loan?

Insurance – it’s a subject that is so much fun to talk about. However it is necessary. Start with your home or renter’s insurance and make sure that you have sufficient coverage but not more than you need it. Auto coverage should be reviewed as well. An annual check up on each of these can protect you from both too little and too much coverage.

Life insurance is a type of insurance that people spend either too little time on or too much time analyzing. Which type of insurance would work best for you depends on your age and financial circumstances. The first question you need to ask is do you even need life insurance? If you have a family and loans outstanding as well as future educational costs, it is likely that life insurance will offer you protection in the event of any future surprises. If you have no outstanding debts, no children or they are grown and on their own and you have sufficient assets for all future needs, then you may not need to get life insurance. Or you might choose a life insurance option that has investment benefits as well.

As your income increases over time, you then are able to take advantage of investing some funds into various types of savings for the future. One of the best returns on your investment comes when you have options such as 401ks from an employer. In this type of investment where your employer also contributes a percentage into your account each quarter, you realize a return on your investment just from their contribution. For example, if you contribute 4% of your earnings each period into a 401k account that is matched quarterly, you have doubled your money each quarter. Add to that the increase in the investment over time and this becomes one of the best investments that you can make.

Any investment strategy requires an investment plan. If you follow this one tip alone, you can save yourself countless headaches from bad investments and making poor decisions. Your investment plan should include short term as well as long term goals and needs. Backup funds for emergencies or issues should be invested in secure investments like CD’s or money market accounts. Retirement funds should utilize all employer and government programs as well as other options such as stocks and mutual funds.

In addition, your risk level needs to be determined. Investments come in all risk levels. Investing in areas that are outside your comfort level can make investing more nerve wracking than it needs to be. While a diversified portfolio of investments is best, one that doesn’t match your level of risk exposure is not the wisest of decisions. If slow and steady works best for you, there’s no need to follow along with all of those that invest in high risk investment funds.

As any savvy investor knows, research and education is the key to being successful in the investment market. Learning about the different types of investments that are available is the first step. Deciding what areas in the investment field are ones that work for your investment goals is next. Then research and see what the key players are buying and selling. See what trends you can find to help you in making your decisions. And then start investing.

Getting yourself on track financially may take a little time. However by starting with the first step and moving through each step as it becomes possible, you can create a financial plan that successfully protects you and helps your financial position over the years. And the feeling of security and comfort that that can provide is priceless.