Good Financial Plans Are The First Step To A Great Financial Future!
Do you cringe when you hear a conversation or read an article suggesting that you make financial plans for your future? If you do, you are not alone.
Taking a firm grip on our finances to assess, plan, and achieve all that we hope to causes many people to feel overwhelmed and unprepared. All too often we just continue to live paycheck to paycheck and are unable to move ahead in the way that our heart desires.
It doesn’t have to be this way! You can decide today to make your financial future brighter and brighter, one day at a time. Take a look at these suggestions and decide that you will look at your finances and get the advice you need to make a plan that will allow you to achieve the goals you have for your life.
You don’t have to know everything today. You don’t have to change everything about your finances today.
Begin today. Make a plan. Then put small changes into action and watch your finances improve and your financial life becomes more and more stable.
Money is much more than just numbers and math.
Personal finance is about how you feel and behave with money. It can be more important than what you know to be logically true.
People have all kinds of money scripts, and it’s important to understand your own. Recognize what stories you’re telling yourself that could hold you back financially and keep you from achieving your dreams in 2016. Remember, every penny counts! Then make a plan. Here are some ways to get there:
Set clear goals.
Is 2016 the year you finally kick your debt to the curb once and for all? Or maybe you’re ready to really jump into investing to build long-term wealth. Whatever you want to do with your money, write it down!
Don’t bite off more than you can chew. Choose one to three big goals you want to focus on for 2016.
Make everything bite-sized.
Break down each goal into smaller pieces so it’s more manageable. Consider writing out a specific, actionable to-do for each month that will get you one step closer to success.
Place deadlines on everything.
Goals without deadlines are just dreams! Choose a time when each goal will be reached. Put due dates on each bite-sized task, too.
Find someone to hold you accountable.
Be brave enough to share your goal with someone else, and then ask them to help hold you accountable. You can hold them accountable to their goals, too. Check in periodically, offer support, and encourage each other to do the hard work required to reach the success you both want.
– via blog.mint.com
Make Long Term Financial Plans Too
Don’t forget to make long-term financial plans a part of your overall planning. It seems like a huge accomplishment to save for retirement, but the sooner you begin, the easier it is to reach a goal that will give you the kind of retirement you want.
Here is a basic look at how to begin the process of planning and saving for retirement.
Estimate Your Retirement Income Needs
One rule of thumb says that, once retired, you need 80% of your final salary to be financially comfortable. But you might be fine with less if you’re a prodigious saver who regularly socks away 20% of income, rather than the often recommended 10%. You might also make do with less if, by retirement, your mortgage is paid off and the children are off the family payroll.
Get a handle on Social Security and pension income.
If you are entitled to a traditional employer pension, check the latest benefits statement from your employer or contact human resources. Meanwhile, to find out how much you might receive from Social Security, go to SocialSecurity.gov and click through to the Retirement Estimator. If you’re unable to use that calculator, try the Quick Calculator, also available at the Social Security website.
Set a goal for your retirement nest egg.
Take your answer from Step No. 1 and subtract the sums from Step No. 2. Let’s say you will need $50,000 a year to retire in comfort and you’ll receive $20,000 from Social Security and nothing from an employer’s pension plan. That leaves $30,000 a year that will need to come from savings. To generate that income using a 4% portfolio withdrawal rate, how much would you need to save by retirement? If you divide $30,000 by 0.04, you’ll get your answer: $750,000.
Calculate required monthly savings.
To find out how much you need to save each month to amass your target retirement nest egg, try the Savings Goals calculator at Dinkytown.net. Err on the conservative side by plugging in a 5% annual return and 3% for inflation.
Prepare for financial emergencies.
Get your latest pay stub and see how much you take home each month, after taxes and any retirement-plan contributions are deducted. From that sum, subtract any additional monthly savings. That should give you a reasonable estimate of your typical monthly spending. Experts often suggest holding an emergency fund equal to between three and six months of living expenses. Go for the full six months if your job is tenuous or you’re self-employed. Opt for a smaller amount if your position is more secure, your spouse also works, you have a home-equity line of credit or you have other savings in a regular taxable account. – via MarketWatch
Have you made plans to move your finances forward? When will you begin?