Financial planning ideas are abundant but many people simply do not put the ideas into action. Financial planning ideas can help you meet your long term financial goals and your short term goals like giving your kid a private school education.
Most financial planning ideas can be customized to your personal financial goals. Whether your goals are to start a new business, take advantage of some tax benefits or become a real estate mogul, there are ideas that you can use to get on the right track.
There are different basic financial planning ideas that are relevant at different times in your life. For example, if you are just starting out in your career, and you are unmarried, your focus should be on looking for ways to plan to reap some tax benefits.
As a young adult just getting started you should also be thinking about retirement planning, yes, now is a good time. The sooner you start investing in your retirement future the better off you will be. Also, consider starting to regularly donating to charities, it is tax-deductible, and it will make you feel good. Catholic charities, the Red Cross, and other well-established charities help people down on their luck, and you get to write off the donation.
If you are already married, have a kid or more, financial planning ideas for your situation is going to be far more goal-oriented. Your financial planning ideas have to revolve around not only what is good for you but what is going to be good for the family as well.
There are some things that you absolutely have to plan for. If you have a family you should have already spoken to an attorney about getting wills in place for you and your spouse. You should be planning for your first big real estate purchase, typically a residence for you and your family. If you already own a primary residence consider speaking to a real estate agent about a second home for vacations that you can rent out part of the time.
If you are at the point in life where you are ready to venture out on your own, hopefully, you have a business attorney on your side to make sure you do not make any wrong moves that will jeopardize your family. An attorney can ensure that you understand business loan programs before you sign an agreement. It is always important to know exactly what you are getting into both personally and in business.
There are a few basics that are true at any stage in life:
- Everyone should have at least one savings account, preferably three
- Everyone should have a solid retirement plan
- Everyone should have short term financial goals
It is estimated that 25% of families in the US have ZERO savings. It is very important that you have a cushion to rely on in the form of savings. There is a saying that has been floating around for the last decade or so “Most people are four paychecks from being homeless”. While that may sound like a bit of an exaggeration, if you do not have savings it could be your truth.
Living paycheck to paycheck just to get the bills paid, is dangerous. The first thing on your list of financial planning ideas is to figure out how you can start at least one savings account, but you should have three.
The three savings accounts you should have should be one for emergencies like the water heater gives out, or the car needs emergency repairs. The next account should be one that you only put money in and never take it back out. This is an emergency account as well, but this account is for the really big emergencies in life, like you lose your job and have no income for a while.
The last savings account is not really a savings account but you should treat it like it is, it is your retirement account. Stashing money regularly away toward your retirement is an absolute necessity. With the way things are going with Social Security, no one really knows for how long it will be around. You do not want to get to retirement age and have to work forever because you did not put money away to live on.
It can seem nearly impossible to save especially when you have young kids at home and are trying to build a life, but you can. Some financial planning ideas can simplify savings. For example, pay yourself before you pay anyone else. Even if you can only manage to stash away 5% of your salary, do it. Break that 5% up into three parts and make sure each of your savings accounts gets some money tucked into each pay period.
The idea is if you pay yourself first each and every paycheck you cannot miss what you do not have. Set up automatic drafts so that the money comes directly from your paycheck and you do not have an opportunity to see it.
Other financial planning ideas are more focused on getting other people to jump on board with you on your road to savings. For example, even if you love where you work, if your company is kind of skimpy on the 401K contribution find another job. Retirement benefits are a big deal, don’t settle for less than you can get.
Savings is also a great way to meet short term goals. One of the best financial planning ideas out there revolves around how to afford a brand new car. Let’s say you are ready for a new car but your old car is okay. Instead of going out and taking out a loan, calculate what the loan payments would be, then start putting the money in a separate savings account. In a couple of years, you will be able to make a cash deal on a new car and save tons of money on interest payments.
Savings can be a very powerful tool that will help you meet both your short term and your long term financial goals. You just need to be disciplined about it. Developing the habit of saving for what you want and need will save you a ton of money over your lifetime.
There is no better way to secure your financial future than to start saving right now. No matter where you are in life, you can stash at least some money away. It can literally change your financial future.
It can be hard to focus on something that may not be on the radar for another 25 years but if you start ASAP looking for financial planning ideas for retirement, you will be able to retire from business when you are ready.
There are a few facts about all financial planning ideas for retirement. The first is they all have the same advice when it comes to when to start. Now, now is the time you should start planning for your retirement. Whether you are 23 fresh out of college or you are 43 and well-established, you have to plan for retirement, and if you have not, you should right now.
Here are some sad statistics that might help motivate you to take action now:
- 24% of Americans will have to put off retirement because they do not have the money to retire
- A mere 18% of adults believe that they will have the money to retire
- Around 40% of Americans have not planned for retirement
Those statistics are really cringe-worthy. Do you want to have to work until you die because you did not plan for your retirement? Of course not. You want to work until you are ready to live a life of leisure and then just stop working.
Financial planning ideas for retirement are abundant. The thing is with retirement planning the sooner you start the less you have to sock away. Of course, many retirement plans also come with a slew of tax benefits.
For example, if you contribute up the maximum to your 401K you can reduce your tax liability greatly, which is not only a great way to keep more of your own money but many times when you do the math you will actually wind up not really missing the contribution. A business attorney could help map out this plan for you.
Anytime you get a windfall of unexpected money like a tax refund or dear old aunt Sally leaves you something in the will, add that money to your retirement account. You cannot miss what you did not have in the first place, and you will grow that windfall.
Ultimately the point is do something. Do not wait until you buy your house, do not wait until the kid’s tuition is paid down, or until you have that new car you have been eyeing, pay yourself first and send it directly to your retirement account. You will never regret being ready to retire.
Maybe you are one of the rare few that has their financial life ducks in a row. You have the emergency funds all set up, you are reaching both your short term and long term financial goals, retirement savings is flush, now what?
You invest. Growing your wealth is one of the sure-fire ways to financial freedom. You do not have to wait until all the financial planning ideas are complete to invest. You should wait until you have everything on track before investing.
Whether you have your eye on investment hotels for sale because you and your spouse have always dreamed of retiring and doing something in the hotel industry, or you are looking at opening a franchise, the best thing to do before you make a move is to enlist the help of a financial advisor.
Even if you have gotten to this point on your own by following some simple financial planning ideas, before you make a big move financially it is always a good idea to weigh your options with the help of the experts.
There is always risk involved with any investment. The choice that you have to make is “how much risk are you willing to absorb? “ Are you willing to put it all on the line because you are that sure, or do you want to take a little more conservative approach.
The only way to do a real risk analysis is to consider the potential losses and whether or not you have time to recover from those losses. Now, it does not mean that you should not take risks, but they should be calculated risks.
Things that you never want to jeopardize with investments is your home by literally betting the house on an investment in the form of a much higher mortgage or a second mortgage. You also do not want to jeopardize your retirement especially if you are over the age of 50.
The closer you get to retirement age the more cautious you should be with your investments. Moving conservatively will help you to protect what you have built. After a certain point in time, rebooting, and recouping losses is much harder.
You can literally spend hours every day reviewing financial planning ideas but none of those ideas will work unless you put them into action. Get serious about your finances and start taking the steps that you need, to get your financial life on track. The first steps are the hardest but once you get started there will be no stopping you.
Having your financial ducks in a row will ease stress and will improve your quality of life.