Tag financial planning

Personal finance and planning are a roadmap that helps us achieve our financial goals very easily. Financial planning can be done on our own or we can seek the services of qualified personal finance professionals. Personal finance and planning are a mix of current finances, financial goals and strategies to achieve our financial goals. Good personal finance planning consists of cash flow, savings, debt, investments, and insurance. Financial planning can be defined as an ongoing process that looks at our financial picture to design strategies for achieving short term as well as long term financial goals.

An ideal financial plan reduces our stress about finance and support our current monetary needs. Creating a financial plan is very important in the post Covid world since it makes the most of our assets. Financial planning has become more affordable with the elegant entry of online services like robo advisors. It is an undisputable fact that financial planning has become more accessible than ever in the contemporary digital world. Personal finance and planning include setting financial goals, tracking money, keeping a budget for emergencies, dealing with high interest debt, planning for retirement, optimizing finance with tax planning, investing to build future goals, growing financial wellbeing and estate planning.

Setting Financial Goals

A great financial plan is inspired by our financial goals and we should try our level best to make our financial goals inspirational. Having concrete financial goals is helpful in identifying and completing next steps in financial planning.

Tracking Money

A good financial plan reveals ways to direct more to savings or debt pay down and investors can create immediate, medium term and long-term plans seeing where their hard earned money goes. Developing a budget is a conventional immediate financial plan and 50% of the money can be put for needs like housing, transportation, utilities and recurring payments. 30% of the money should be set aside for expenses like dining out with family, entertainment and buying clothes.

It is an innovative idea to use 20% of the money towards savings and debt repayment. Reducing credit card or other high interest debt is a common medium term plan and planning for retirement is a long term plan.

Keeping a Budget for Emergencies

Putting away cash for emergency expense is the basis of any well designed personal finance plan. $500 will be enough for covering small emergencies and repairs and the next goal should be $1000, living expense of one month. Building credit is another smart way to shockproof our budget and good credit paves the way towards getting a car loan. Excellent credit boosts budget by getting cheap rates on insurance schemes.

Dealing with High Interest Debt

Paying down high interest debt such as credit card balances, payday loans, and title loans is an important step in any financial plan.  A debt consolidation loan or debt management plan is helpful for persons struggling with revolving debt.

Planning for Retirement

Considering 401K as a part of retirement planning is really worth and IRA(Individual Retirement Arrangement) is another savings option for retirement planning. Investment accounts availing tax benefits can build retirement savings up to $6500 a year in 2023.