Now is a good time to begin thinking about your annual financial plan. If you have already started to plan, then you deserve a *virtual high five* from us! If you haven’t started, don’t worry – this guide may help you understand how to begin planning for your financial future.
Why should I bother thinking about a financial plan?
Outlining your financial plan is a way for you to determine where you stand financially, and a way to keep track of your progress towards where you want to be in the future. It’s about visualizing the life you hope to have in the future, and charting a course to get there.
Financial Planning may seem like an overwhelming task, but we’ve outlined 5 basic steps to help you start today!
1. Document your financial inventory – Before you can develop a plan for the future, it’s important to know where your financials stand at the moment. Start by taking a financial inventory, this includes identifying your credit score, debt load, account balances, assets, and net worth. Once you understand what you are working with, you can begin to define where you would like to be in the future.
2. Set & prioritize goals – Your financial goals will most likely change throughout your life. For example, you may have children who want to attend college one day. If so, incorporating savings towards a college fund will help you reach that goal. Once you have taken your financial inventory, subtract your monthly expenses and then you will have a clear understanding of how much money you can put towards your goals. It’s up to you to decide which type of goal to prioritize first.
Financial goals can typically be broken down into these categories:
- Emergency savings
- Debt Payoff
- Short-term savings
- Long-term/Retirement savings
3. Establish a budget – Budgeting might have a negative reputation but it’s essential for accomplishing your financial goals. Whether your goal is to retire by a certain age or pay off a student loan, you’ll need to save money to accomplish that goal. Establishing a budget will assist you in creating surplus money in your finances and put you in control of your spending.
4. Insurance – Invest to protect your $$$ – Insurance is a fundamental component of financial planning because it protects your financial assets. Accidents and disasters can happen and having the proper protection may help you to recover without draining your financial resources or leaving you with a large debt. Don’t let gaps in your insurance coverage ruin your financial future. Contact us to make sure you have the coverage you need!
5. Don’t be afraid to ask for advice! – You may now understand the basics of how to begin your financial planning journey, but you don’t have to pretend to be an expert. Financial advisors can help you evaluate your financial situation and work with you to develop an extensive plan of action. Reach out to a financial advisor with any additional questions or concerns! You would not operate on yourself if you are not a doctor. Does that make sense? It’s the same concept.
Here are two reference sites to assist you in determining your financial goals and progress.
Call us today!
Boyd Insurance and Investment Services is here to help provide Protection for Life through all of life’s seen and unforeseen circumstances. If you have any questions call (941) 745-3800
