Financial Planning is all about choosing the right road for you. You decide on the right road by setting a financial goal. So let's talk about setting financial goals. The first step in setting a goal is to ensure that the goal is realistic.
In this case, realistic means that you have a reasonable chance of achieving the goal. Second think about your own values about money. In other words, what does money mean to you if you want a little lifestyle that requires a high income? Are you willing to make the effort needed to generate that high income earning a high income may require you to choose a different field of study and it may require you to work long hours. Here'S another consideration, regardless of your level of income. Consider, whether or not you are self disciplined about saving money and investing, are you the type of person who always sets aside money for a rainy day, or are you a person that seems to have money slip through your hands and can't seem to save anything contrary To popular belief, many high income earners don't have the self-discipline to actually save money. Think about these scenarios and consider your own views about money. So far, we've talked about setting realistic goals and considering your personal values. The third factor in goal-setting is your time frame. Intelligent financial planning requires you to consider different time frames for your goals. So let's say you are in $ 60,000 a year and you're 30 years old. Let'S also say, your financial planning includes a goal to save enough money for a down payment on a condo and to do that within 5 years time. The condo you want costs $ 150,000, so a 10 % down payment would be $ 15,000. You also want to be very diligent about investing for retirement and are planning to retire at age 60, which is 30 years from now, once you consider your goals and your values think about a time frame for reaching your goal, given where you are now, let's say That you can save 5 % of your before-tax income each year for the down payment on the condo, 5 % of a $ 60,000 year's salary is $ 3,000 a year after five years you have $ 15,000 accumulated, so you'll need to be self disciplined about saving And investing those dollars based on where you are now and your rate of saving is $ 15,000, a reasonable amount to save for some of you that might be perfectly reasonable for others with more financial demands. This might be difficult. Also, consider is that downpayment large enough to buy the condo you want. If not, how can you accumulate more savings? If you don't feel like you can save a larger amount, would you consider buying a less expensive home? The purpose of financial planning is to get you from where you are now to a particular goal. You as you move through life. Your financial planning focus will change. A young person in their 20s may have the goal of saving for their first home. An executive in their 50s is more focused on planning for retirement. If you begin to think about your financial timeline in terms of life stages, you'll have a more complete picture of the financial planning. You'Ll need to do over your lifetime. The first stage will discuss is starting careers. This stage is defined as people in their early 20s to about 30 years old during career years. Many people graduate from college, regardless of your schooling. Everyone starts a career of some sort during this period of life. In this stage, you'll need to establish an emergency run. Saving for a rainy day, if you have an unexpected car, repair or medical bill, you can access the emergency fund. Since we face these problems throughout life, maintaining an emergency fund will be part of every stage in your life. This early stage is the point where everyone needs to get insurance in place. Medical insurance needs to be a top priority. Many young people are reluctant to get medical coverage because they are generally healthy in this age range. Everyone, however, should at least have catastrophic medical coverage.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. Archives
December 2018
Categories |