Financial planning is much more than just saving and investing. It’s more about what you keep than what you make; always remember that.
Financial planning is setting a course, monitoring that course often and following that course until you have reached your destiny.
A successful financial plan is one that will help you to maneuver around whatever detours you face on your journey. You will have set- backs and a strong financial plan helps you overcome those setbacks.
Your financial plan is your road map to get you where you want to be financially speaking. This road map is supposed to get you from one point to the next. You can build a strong financial future if you have a strong road map to get you there.
Your financial plan must take into account your entire financial picture; so be sure to include tax planning and retirement planning. Let’s review the steps you can take to start your financial plan .
Successful Financial Planning:
Action Step #1 – Set Your Course:
- Start with your financial goals. Do you have any financial goals?
- Have you ever asked yourself where you want to be 5 , 10 years, 15 and 20 years from now?
- Do you want to be earning the same amount of money?
- Do you want to be in the same job?
- Do you want to still be working?
- What do you want your net worth to be?
- When do you plan on retiring?
- What do you want to do when you do retire?
- What other financial obligations will you have in the future?
- Will you have to care for elderly parents?
- Will you have children who want to go to college?
- If you have children who will go to college in the future, are you saving any money now for them?
Action Step # 2 – Monitor Your Course:
- You may sometimes need help monitoring your own course.
- Others may see red flags that you don’t.
- Work with a financial planner to help you monitor your progress.
- A financial planner can see red flags that you may miss.
- Planners can also make suggestions to get you back on track.
- If your employer provides a 401k adviser as part of your 401k program; work with that advisor.
- Work with your accountant to do some tax planning.
- Proper tax planning may help you save money today.
- Save money by investing in your retirement plans; you lower your taxable income.
- Retirement planning experts say that you should start saving for your retirement the day you get your first pay check.
- If you develop the habit of investing a portion of every paycheck, starting with your first, retirement planning doesn’t become a chore because it’s a habit.
Action Step # 3 – Follow Your Course:
- Through financial setbacks stay true to the financial course you set.
- You have a financial plan to set a course to keep you financially strong.
- When you started your financial plan, you determined how much money you will need to reach your financial goals.
- Stay true to that investment plan you originally established.
- If you set out to maximize your 401k contributions to receive your employer’s match, continue to do so.
- If you planned to pay for your child’s college education, stay on course.
- When you set your financial course, you had strong reasons for doing so; don’t back down.
- The financial decisions you make today will significantly impact your financial position tomorrow.
Financial planning, tax planning, retirement planning all require a commitment from you. You know what you want, you now know you need to set a course to get there. Stay true to yourself and your financial goals.