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No matter what type of job you have or how much income you earn each year, saving for the future is always a priority. However, if you’re like more than 21 percent of working adults, you find saving money almost impossible.
There are many reasons people struggle to put money aside. However, one of the most common reasons people find it tough to save each month is not having a clear financial plan.
This plan makes saving for your future much easier. So, where do you start and how can you build a plan that works for you? Here are a few key tips to help you get started with financial planning in earnest.
Set Clear Goals for Your Financial Plan
Before you can start creating a firm financial plan, you need to figure out what you’re trying to build wealth for.
Are you looking to increase savings to build a family? Do you want to start saving for retirement? Are you just trying to build a safety net to help you get through tough financial times?
Whatever the reason is, write it down. This will help you stay on track as you build your plan.
Once you understand why you’re trying to create a financial plan, set clear and attainable goals to help you along your journey. Remember, it’s okay if your goals start out small. This makes it easy to track your progress throughout the year.
As you reach one goal, celebrate but then set another equally attainable goal. This will help you stay motivated to stick to your plan for years to come.
Establish a Firm Budget
No financial plan can be successful without a firm budget. Take a look at your regular monthly expenses and the amount of money you bring in each month. Ideally, you’ll want to spend less than you earn so you can build your savings month after month.
If you haven’t in the past, consider tracking your expenses for a month to see where you’re spending the most and what you can do to make improvements. Once you understand where your money is going, it’s easier to set and manage your budget.
With those numbers in mind, do what you can to stick to that budget every month.
Start Looking for Ways to Cut Your Expenses
It’s a good idea to look at your regular monthly expenses and see if there are things you can do to lower them as much as possible. Again, look at where your money is going and make adjustments as needed.
For example, if you’re paying for subscriptions that you no longer want or need, cancel them. Talk to your insurance providers to see if there are any current discounts you may qualify for. If you’re eating out for lunch every day, start bringing food with you to work.
These simple changes can end up saving you hundreds each month. That’s money that you can use to grow your finances and reach your goals outlined in your financial plan.
Pay Down Your Existing Debts
Believe it or not, the average American family owes about $8,398 in credit card debt alone. Every dollar of debt you owe, you have to pay interest on and that interest can add up over the course of the year.
Worse, it takes away from your ability to save money quickly.
The best thing you can do is pay down your existing debt as aggressively as possible. Put as much money as you can toward your existing loans, credit card balances, and any other debt you might have.
As you pay down your debt, you’ll end up paying less in interest and can start building your savings more quickly.
Think About Investing
The main purpose of any personal financial plan is to grow your wealth. The easiest way to do this is to start investing at least some of your money each month.
You don’t have to invest hundreds of dollars every month in the beginning. Even adding a few dollars to an investment fund can add up over the years.
Once you start to grow your wealth and build your income, you can start investing more of your money.
Work With a Financial Advisor
If possible, try to work with a financial advisor as soon as you can. They’ll be able to guide you through the investment process and can help you reach your goals more quickly even if you don’t have tons of money to invest at first.
That said, you’ll want to choose an advisor you can trust. Start by searching the internet for “fiduciary investment advisors near me” and read up on each advisor’s reputation.
If you can, schedule a consultation and meet with them. This will give you a chance to see if you’re comfortable working with the advisor and like the types of advice they provide.
If, for any reason, you’re not comfortable with an advisor, keep looking. You want to choose a professional you can trust in the long run.
Be Proactive and Keep Checking In
Every financial plan is dynamic. This means it needs to change as your needs and your goals change.
Take the time to check in with your plan and see how you’re progressing. If you need to make any adjustments, do so.
Remember, modifying your goals doesn’t mean you’re failing. It just means you’re being responsible and doing what’s right for your financial situation.
Keep These Tips in Mind
Building a solid financial plan is the best way to set yourself up for success in the future. Keep these tips in mind and you’ll be able to navigate the financial planning process with ease.
Just remember to keep checking in with your plan and your goals each quarter. This way, you’ll know where you stand and can make adjustments as needed.
Looking for more tips and tricks to help you build your wealth? Check out our latest posts.