Some of my friends have recently asked me if it is easy to make a Personal Financial Plan (PFP), as they do not want to make huge excel tables and enter complex formulas. They do not understand where to invest money, how to increase profit, where to get money for wishes and dreams, how to make money and many other aspects.

Indeed, I see no sense to go into all those details as there is an easy and convenient way to make a PFP! The instructions for composing a Personal Financial Plan are very simple. You should take just a few steps, and I assure you that you will achieve all your goals!
1. Define your financial goals
It is important to describe everything that you want to buy: a car, a new remodeling, a new apartment, a phone, a trip to India, etc.
2. Choose 3 main goals from the list
We will get back to the remaining goals a bit later. But in the beginning, it’s better to work with 2-3 goals, which are the most desired or most critical at the moment. I would advise considering the following options:
- Something that is important to do for my future (it can be a new remodeling, an apartment or a training);
- Something that is vitally essential for me (for example, a new phone, instead of a broken one, or an expensive doctor);
- Something that I really want, but there’s always no money for it.
It would be nice if one of the goals was a stabilization fund for 9 months.
Thus, you will understand that you are working in all the main areas, while the motivation will be higher. Indeed, we often face the situation when we choose what we want or what we need, sacrificing things essential for the future.
3. Keep a record of expenses
Make a budget for a month and start recording your expenses. You should record ALL your expenses to understand what you need to buy, how you spend money, how you distribute the budget. After all, if you do not know how you spend the money, it is impossible to understand how much you will be able to allocate for your wishes.
We advise making a table of expenses distributed by the main categories. Please, find the suggested categories below:
- Meals at home;
- Eating out (in cafes, movie theaters, unexpected snacks);
- Apartment – housing, internet;
- Car, public transport;
- Clothing, shoes;
- Beauty salons, hairdressers, nail salons, cosmetics;
- Sports;
- Education;
- Presents;
- Entertainment;
- Household (household goods, remodeling);
- Services, health;
- Electronics;
- UE (unknown expenses)
The main point is not to micromanage and choose truly generalized categories. At the same time, do not make it too general. For example, I specifically divided the meals into “at home” and “outside”. Thus, the analysis will immediately indicate a drawdown in income.
You can add or remove different types of income or expenses, depending on the personal situation.
Choose any app convenient for you.
4. Analyze costs, indicate how much you earn per hour
It is a very interesting step that will help to analyze your expenses. You need to take your average monthly income and divide it by the average number of hours.
The average number of working hours per month:
- 165 hours per month, if you work 40 hours per week;
- 148 hours per month, if you work 36 hours per week,
- and 99 hours per month, if you work 24 hours per week.
Now we have approached the funniest part. Divide your monthly earnings by the number of working hours per month and get a shocking result! After all, that’s how much you earn when you work hard. And if you do not work, then you do not earn at all.
An example based on a salary of $4500:
$4500 / 165 = $27.27 per hour
Go ahead and consider how much you need to work to pay for the apartment, food and other expenses. How many hours does it take to pay for popcorn at the cinema? Or to pay for a doctor?
In general, this exercise made a strong impression on me. One thing is to know how much you spend per month on entertainment and junk food, and quite another thing is to understand that you have to work hard all day to pay for these short-term entertainments.
5. Plan your costs
Now that you know how much money you spend and what are your main expenditures, you can safely plan. It does not have to be “complicated,” it just should indicate your expenses.
An example of a financial plan based on a $4500 salary:

We don’t have to cut expenses much, as entertainments are what will support us. But all the previous actions and exercises will show you where you spend a lot of money and what you can sacrifice.
As you can see from the example, on average, a certain N amount can be saved per month. Next, I will tell you what to do with it.
6. Distribute money on wishes and dreams
And here it is, the most important and critical thing! Finally, your wishes and dreams have got even closer.
Let’s consider that you have 3 wishes. I will describe the main aspects of distributing and saving money below:
- There are several ways to distribute money between wishes, but the simplest way is to divide N by 3 and distribute it evenly.
- If it takes more than 3 months to make your wish come true, it is better to deposit the money to the bank. So, there will be fewer chances to spend it. Moreover, this money will generate more money allowing to implement your wish faster.
- What deposit is preferable? There are several main important aspects:
- It is better to choose a deposit with capitalization, i.e. when interest is added to the deposit and then the interest also accumulates for the total amount.
- The bank should have online banking and convenient replenishment, otherwise, if you don’t immediately deposit money, you will spend it. Everything should be simple!
- The deposit should have a replenishment.
- Do not be afraid that at first there will be little money for your wishes! Believe me, if you follow the plan, they will come true earlier than planned. It seems that many years are needed to complete the plan. But in fact, salaries are rising, we get new income or presents. And it is better to have 2000 out of 20000 rather than 0. My best achievement is a 2-fold reduction in the plan. Will you beat it? 🙂
- I recommend dividing by 3 all the remaining money for a month, as well as all additional income (present, earnings, and findings) and adding them to the deposit for your wishes!
- If you think that you will have to save for several years, remember that there was nothing at all for many years! As practice shows, you get involved in the first month, starts counting, and money starts appearing from nowhere! It is impossible to explain, but it always works!
- As soon as one wish is fulfilled, immediately start another one. You should have a wish list for this.
- Thus, all wishes will come true. They can change them, reorder the priorities or reject them depending on a situation.
An example of a wish list based on a $4500 PFP:
I will consider a phone, a new remodeling, and a stabilization fund as an example.

Following these simple steps, you can easily fulfill your financial goals and you will know exactly how much money you need for being happy!
I wish you good luck in making your wishes come true:)