6 Tips To Plan For Your Financial Future

Planning for your financial future doesn’t have to be a burden. Just follow these 10 simple tips and you’ll achieve your financial freedom that will enable you to protect your family.

1. Adopt The 3 P’s

Seek For Professional Advice

When you have health problems, you go to see a doctor. When you need help in legal matters, you see a lawyer. Why wouldn’t you seek for professional advice in matters that concern your finances and your life insurance? Certified financial planners in Burlington will explain you all your available options, so that you can come up with a solid plan to reach your financial goals on both short-term and long-term.

Be Prepared

As unrealistic as it may seem, you can plan for the unexpected. A solid financial plan that includes life insurance among other things will offer you the peace of mind that you’ll be able to cope with any emergency you may have to face in the future.

Say No To Procrastination

Regardless of your age or financial situation, today is the bets day to start planning for your financial future. The plan you lay out today will serve as a foundation to build on, in regard to your future financial security.

2. Plan Your Path

How will you know which way to go, if you have to idea where you are? The first step of any financial planning process is to take a honest look at your current financial situation.

3. Put Together A List And Check It Often

When you have to face an emergency situation, the last thing you want is to search for information and documents. If you want emergencies to find you calm and prepared, make sure you prepare yourself in advance, when you are relaxed and you have clarity in thinking. Create your emergency financial plan and make sure you update it as often as needed. Here’s what you should put in your plan:

  • Three to six months’ worth of living expenses, saved in a separate bank account that you can easily access.
  • A list containing contact details and personal medical records of all members of your family, including blood type, known allergies, chronic medical conditions and current medication. Also include the contact details of your doctor.
  • A copy of all your insurance policies, life insurance included.
  • If you have children, include a list containing their school or daycare name and contact details. Also, make a list of all adults (with their contact details) who are authorized to pick up your kids from school.

4. Insurance Of Your Family’s Future

If something were to happen to you, how would your family be in terms of financial security? The best way to offer them protection is to ensure you get the right amount of insurance coverage and the right type of policy. You’ll need to update this insurance protection over time. Make sure you review it with a financial advisor every 10 years, or whenever your life takes an unexpected turn such as the birth of a child. For a better understanding of your protection needs, consider using a tool like My Insurance View.

5. Decide What WILL Happen After Your Death

If you haven’t considered to put together a will, it;s time to stop procrastinating. In the event of your death, the laws will determine the division of your wealth, without any consideration for your personal wishes, or for the wishes of your family members. Creating a will is far from being a straightforward endeavor, so consider seeking for professional help.

Writing your will is a great step, but what are you going to put in this will? You should use estate planning tools such as trusts, life insurance and long term care insurance to secure your assets. Estate planning requires professional advice, as it is a too complex matter to tackle on your own. Consider updating your estate plan after each major life event such as death, marriage, and child birth.

6. Get Rid Of Debt!

Finally, the fastest method to gain some financial security is to reduce, or to completely get rid of debt. Make sure, though, that your goal of becoming debt-free is a realistic one. If you can;t do any better than this, consider at least to use a debit card rather than a credit card to pay for your bills.

4 Financial Habits You Can Develop Now

Don’t Wait Until It’s Too Late Before You Start to Develop Good Financial Habits

Habits That Can Improve Your Financial Health

Our ability to meet goals and to becoming the person you want to be can be dependent on the habits that we have. Biting one’s nails, smoking, overeating, and other traits are all bad habits that can come in the way of becoming the best of persons.

The same truth applies to finances. If you have bad money habits, you can damage your financial health and this can affect your financial security in the long run. If on the other hand, you develop financial habits that are healthy, it will do wonders to any long-term requirements that you may have to pay for the education of your children, or for building up a corpus for retirement.

The sooner you develop such good financial habits, it will greatly increase your chances of meeting the goals that you have in this regard. Four financial habits that you need to start out on as soon as possible are:

1. Needs and Wants Must Be Separated

This is an essential step in developing healthy financial habits. You must know where your money is being spent, and then figure out where you need to allocate it, so that is used in the correct way.

You need to have a spending plan that you can easily adhere to, and impulse buying has to be avoided to help in building savings. Prepare a budget plan that takes into account the income that you can generate and gives you an understanding of your spending on monthly needs. Sum up the expenses for what you consider needs, like rent, car payments, internet, and cable costs, food and other essentials, as well as the desired monthly savings, and you will have automatically created a savings plan. This must be a sum that is below your expected income, and anything left over can be cash that is available to spend in any way you want.

This is the money that is then available to spend on any wants that you have. In this way, you can be sure that you are never overspending. Any savings that still accrue can then be deposited into your savings account. If you do this, you will find it easier to resist the temptation of spending, and it allows you to start the next month afresh. If you find you are consistently having extra money, it makes sense to increase your planned monthly savings amount.

2. Save Automatically

Find a consistent mechanism for savings that will ensure that you save a fixed amount as soon as you receive a paycheck as this can help you to make progress in long-term goals for savings. Whether you are putting your savings into investments or into a savings account, make sure the contribution is made automatically, so that the money is no more visible to you. This can reduce any temptation to spend this available amount.

What is the need for such a mechanism? If you do not have such an automatic savings plan, you may find that while you save $500 in one month, the next month you may have no money to save. You may have still saved money overall, but this is an irregular saving habit and is one that you can do without. Start small. Start with $100, save it consistently, and it will be of great benefit to you in the long run.

3. Participating In an Employer-sponsored Retirement Plan is Advisable

One financial habit that is important to build up is the saving you need for life after you retire from your earning career. Tax-deferred investment growth has a lot of power to keep your savings adding to constant growth. A major benefit that comes from retirement plans like 401(k) and others is that the money you put into this plans is pretax, and this reduces your immediate present tax liability by lowering your taxable income.

Where an employer chooses to match your contribution in a 401(k) plan, you can benefit and must take advantage of this gesture by contributing as much as you can. If you do not do so, you will lose the free money that your employer offers you. As an example, an employer can offer a retirement plan that allows you to contribute 5% of what you earn as salary and offers to put up a matching contribution of 3% of this amount. So, if you fail to put at least 3% into this plan, you are in effect, refusing a salary raise of 3%.

If there is no such retirement plan available with your present employer, you would do well to open a retirement account that is self-directed, like an IRA, so that you get the benefit of retirement savings that have a tax advantage.

4. Investing Must Start Now

Investors can use the time to their advantage if they save consistently and invest early. Compound interest is a powerful tool that keeps adding to the smallest of amounts over the years. In compound interest, the interest you get from your savings is added to the principally saved amount, thus leading to an increase in the interest you get, even if there has been no change in the interest rate. The earlier you start saving, the greater will be the advantage that you get from compound interest.

Boosting your rate of saving, as it can help you to benefit at times when there are periods of low investment returns.

If you are already into a habit of saving correctly, it is good. If not, it is never too late to develop it even now. You can have your own needs and goals, but they both cannot be satisfied at the same time. Set the right priorities for your goals, start building habits that are healthy, so that they help you to reach those goals. Keep needs and wants separate, save often and early, look for the advantages of retirement plans that are tax-friendly, and invest now so that your financial foundation is solid, and takes you in the direction you want to go.