Financial Planning 101: The How to
Everyone wants a secure future for themselves. The comfort of secure financial confidence is a feeling that has no match. Achieving that feeling and holding onto it take commitment to saving well and maintaining good saving habits that hold strong throughout the years, straight on through your retirement.
All of this starts with careful financial planning. Without a financial plan, the road to a gainful retirement fund can be tricky to navigate. You need to make goals and write yourself the road map to get there. There’s time and mindful consideration to be put into your financial plan, but the gains of a sound financial plan will put you ahead in the race towards retirement.
The start to any plan is deciding on your financial goals. What do you want out of your retirement? Do you want to maintain your current quality of living? Do you plan to move or buy a vacation condo? Do you want to travel nationally or internationally? Do you have plans for home improvement? Do you want to go back to school?
There’s a lot to consider and to prioritize. Looking at the practical, long-term goals is a good place to start. Determine what ongoing expenses you will have and how much you will need to have saved in order to have the monthly income you’ll need from your savings to stay stable throughout your retirement. Don’t forget to consider unexpected expenses or life events that may require an extra ‘safety net’ of funds. Then consider the expenses of your smaller, more recreational goals like travel or schooling. These plans can sometimes be much more expensive than you realize, so researching these costs and accounting for some overage from inflation or changes in the financial landscapes of the industries you’ll be researching will give you a better idea of how much money you will need set aside just for those goals. This all might seem overwhelming, but with the right saving habits and investment plans, you can achieve your financial goals!
With your goals now set, it’s time for the next step in planning for retirement: Examining at your current financial situation. It’s never too soon to start early and any money put aside is money you can count on having in the future, but it’s important to look at how much you can afford to contribute to your savings funds. The more money you can put in, the better. More money in an account means more gain compounded from interest rates.
By looking at your current financial state, you also know how far you need to go to reach those goals you set. To determine your current financial situation, you need to calculate your net worth. Your net worth is your assets (savings and checking accounts, cash on hand, property, etc.) minus your liabilities (mortgages, debts, loans, etc.). An easy way to do this is create a two column chart, one for assets and one for liabilities, and calculate their sums. After that, subtract your liabilities from your gains and you will have your starting net worth.
After this, you need to determine your monthly budget. Look at how much you can save right now and for any frivolous costs that can be cut and put towards your financial goals. Start saving where you can and taking advantage of opportunities for savings. Whether it’s cutting a few more coupons or waiting on a purchase until a special saving opportunity arises for it, you can save up money fast by letting dollars saved compound upon themselves over time. Actually planning a monthly budget and adhering to it can help you build healthy saving habits. Soon, you’ll find saving money really is easy!
The biggest part of planning for retirement is knowing how to invest. You can study this yourself through the internet and through printed materials available through financial planning companies and you can work with a financial advisor to get the most out of your potential financial prospects. Look into retirement savings plans offered by your current employer, like 401(k)s and petition plans, to see what investment opportunities are already available to you. Read up on Roth IRAs, traditional IRAs and annuities to see what individual retirement investments you can make. You can also look into the savings accounts and bonds are available through your bank as an extra source of saving.
Before investing, you will need to consider how much risk you want to take. Risk assessment and even picking out investment accounts are tricky to do solo. With enough research, it’s possible, but often times, working with a financial advisor makes the process a lot easier from start to finish. It might be a bit of an investment, but typically, the payoff of working with a well-reputed advisor can take some of the weight of retirement planning off of your shoulders. Working with an expert gives you that edge you need to take larger strides towards reaching that perfect retirement.
Safe Money CLA is the best place to go for financial planning in Dallas. Our highly-qualified financial advisors have the knowledge and tools you need to make the best investment decisions. We work to help every customer make the most of their investment opportunities by researching important market data and keeping track of every account with care. By working in our customer’s best interests, we can help them reach that state of financial confidence. Contact Safe Money CLA today and talk to one of our expert advisors about kicking off your financial plans today.