When developing a personal financial plan, what is one of the first steps to take?

The initial step in developing a personal financial plan is to assess your current financial situation. This involves taking a comprehensive look at your income, expenses, assets, and liabilities. Understanding where you stand financially is crucial because it provides a baseline from which you can make informed decisions. By evaluating your cash flow and net worth, you can identify your financial strengths and weaknesses, set realistic goals, and create a sustainable plan to improve your financial health over time.

Once you have a clear picture of your financial situation, you can better determine your future steps, such as saving strategies, investment opportunities, and debt management. This foundational assessment is essential to ensure that any subsequent financial decisions you make, such as investing or purchasing property, are aligned with your long-term financial goals and the realities of your current economic situation.