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Creating a Financial Plan
The start of a new year is time to look forward to the future and make financial decisions that can turn the future into something worth looking forward to. Financial planning can help you to meet your financial goals and celebrate life's milestones with a sense of security. Some common financial planning goals include:
Getting married
Buying a home
Growing your family
Sending your kids to college
Starting a business
Living your dream retirement
Protecting your family should something happen to you
Creating a financial plan will help you identify which financial goals are most important to you and will help you create a financial roadmap to reach them. Below, you’ll find the necessary steps to create a solid financial plan.
Set financial goals: Having financial goals is the foundation for your financial success. When it comes to setting goals you want to make sure your goals are well defined and prioritize accordingly. By breaking down your big life goals into smaller chunks, you're not overwhelmed and can easily manage your progress.
Start an emergency fund: Preparing for the unexpected is essential to financial success. Without an emergency fund, you’ll likely end up in debt once again.
Pay off debt: Sadly, you can’t really kick-start your financial future if you’re being weighed down by a ton of debt. Between interest rates, large minimum monthly payments, and the damage lots of debt can do to your credit score, you're better off paying your debts first by creating a debt pay-off strategy.
Investments: Put your money to work for you! If you are serious about building your finances, this is where investing comes in. Whether you invest in stocks, bonds, mutual funds, real estate, small businesses of a combination of all of the above, the objective is to generate cash by increasing the value of the investment.
Insurance: After working so hard to earn your money, the last thing you want is an unplanned occurrence to wipe you out. Insurance is essentially your back-up plan that will protect your assets in the event a life circumstance happens that requires a large amount of money to resolve.
Retirement: By preparing now you are able to determine exactly how much you're going to need to live comfortably in your retirement. Retirement may seem like a lifetime away, but it’s never too early to start!
Taxes: Yes, taxes are annoying, but they're certainly not going away anytime soon and should be included in your long-term projections. Working with a professional advisor can help you stay up to speed on any relevant tax deductions you can apply to help you save money on tax payments.
Estate Plan: Protecting your family should something happen to you is something not a lot of people like to think about, but it's essential! It allows you to determine exactly what happens to your assets after you are gone. A financial planner or estate lawyer can help you set things up correctly.
Life is a journey that can have many twists and turns, and Fort Worth City Credit Union financial planning can help you prepare for them, meeting the dreams you have for you and your family.
