Setting The Stage For Financial Planning Success: Plan, Strategize, And Achieve

Everybody wants to ensure they are headed down the right path in terms of life and financial planning. 

It is not always easy to get started with the process and know what to do. Getting started can be somewhat intimidating, but there are some key things to consider that can help pull a plan together.

Setting a budget and creating goals lay the groundwork for success

According to LearnVest, one of the most important steps to take when working on life planning is to set a budget. Essential expenses need to be taken care of first, and that bucket includes things like housing, food, transportation, and utilities. Another key priority is to set aside money from every paycheck to put toward paying down debt or building one’s savings, and then anything left over can go toward the fun stuff. Sticking to a budget can be a challenge, but it’s essential in order to implement a plan that will provide security down the road.

Setting specific goals in the planning process is important, and these goals will vary from person to person. For some people, a priority will be to build a healthy nest egg for retirement, while others may feel strongly about saving for a child’s college education or other child-related expenses. Whatever the ultimate goal is for down the road, creating a plan and a budget to tackle these goals should be done sooner rather than later.

Early planning paves the way to long-term success

It’s easy for people to think they have plenty of time to start saving for retirement, a child’s education, or other big-ticket items that may seem far down the road. However, starting early tends to lead to greater success in the long run. Wells Fargo suggests breaking down goals into short-term, mid-term, and long-term items, and it’s important to be both specific and realistic about what is possible. These goals may relate not only to things like retirement, but also goals like buying a new house or vehicle.

Once goals are set, it’s time to create a plan and break it all down into mini-goals that will feel easier to achieve. Smaller goals within a larger financial plan may related to paying off multiple lines of credit or hitting a new savings goal. Trying to keep the full picture in mind when tackling an overall financial plan can become quite overwhelming, but breaking things down into smaller steps and goals can help to keep one focused and motivated.

Think beyond savings accounts and budgets to cover all of the bases

It is also important to think about life planning issues like insurance. People are used to paying for car and health insurance, but some brush off coverage for things like life and disability. These types of coverage are frequently offered through an employer, and as Penny Thots notes, these extra types of insurance can go a long way toward providing security for one’s family should an unexpected emergency arise.

A thorough life plan will also include plans for retirement and, if needed, savings for a child’s higher education. Many employers provide opportunities to contribute to retirement accounts, sometimes chipping in a percentage to match one’s contributions, and these can be a valuable way to build a retirement fund. In terms of saving for college, a 529 College Savings Plan is a popular tool that many families utilize.

Utilizing a financial expert may be worth the investment

Where does the help of a certified financial planner fit into all of this? Some people tackle these types of life planning challenges on their own and do just fine, but others like having the expertise and support of a professional. Ask for referrals from trusted friends or family and consider how much you need from a financial planning expert. The Wall Street Journal details that costs and services can vary widely, so it can take a bit of legwork to find a good fit.

Understand other factors to consider

Keep in mind that financial planning involves more than just money. Successful financial planning entails everything from eating healthy to choosing a safe neighborhood for your family to stopping smoking. At a glance, you might think of these as health or lifestyle decisions, but ultimately, they’ll have a big impact on your wallet.

Those who are new to life or financial planning may put off tackling the process, but experts detail that setting a budget and working toward goals early on in adulthood can lead to big payoffs down the road. Budgeting and saving are key basics, but people should also consider how to incorporate other items such as insurance, retirement savings accounts, and college savings accounts when applicable. There are a lot of components to consider when putting together a larger, long-term plan, but investing the time to strategize is key to long-term success.