If this Covid-19 (coronavirus) pandemic has taught us anything, it’s that you have to keep a closer eye on your finances. For many of us who live from one paycheck to the next, your idea of financial planning might just be walking the tight rope of paying the bills that are due or overdue and kicking the rest down the road until the next paycheck comes around.
If you are in this boat and find yourself in the challenging position of trying to save money or create an emergency fund for that matter, then we have some tips on the top decisions one must consider being successful in financial planning.
Maintaining a balance between incomes & expenses.
To avoid a financial planning nightmare, we encourage you to start planning early. This plan will help you balance your incomes and expenses. With this plan, you find the best places to live and how to budget and reduce costs. You will save and create investment strategies to generate more money to supplement your income, if possible. Just remember to stick with whatever plan that you come up with.
You can do it yourself.
One of the most and biggest overlooked aspects of financial planning is the notion that you need expert help. Yes, it is maybe good idea to seek professional financial assistance if you can’t balance your chequebook. However, it is also a task that you can do yourself because it mostly requires you to take a really really hard look at your finances. Sometimes all it takes is a spreadsheet and keeping all the receipts in a given period, such as a month. Jot down and group all these receipts. You can also find a plethora of free financial planning tools online to help you with this task.
Proper financial planning
Proper financial planning is not as easy as it once was. This is especially true when you consider the uncertainty in inflation, social security, and pension funds. Overcoming these obstacles requires a long-term plan, which is a little more complicated than merely relying on your paycheck. Those days are over, and anyone who doesn’t start making additional plans through 401k’s or personal IRA’s will be the ones who fall upon economic hardship.
Keeping an emergency fund
A good financial plan will help you prepare for the moment your income stops coming in so your mind can be at ease, reducing stress and allowing you to spend those days that you are inevitably unemployed, when you get laid off or during an emergency. The plan may require you to downgrade your lifestyle. Just remember that it’s better to have the funds in case of a crisis than not have them at all.
Availing various Insurance coverage for your home and autos
Shopping around for deals in any of your expenses could be an excellent way to save on some costs. For example, you can shop around for your car insurance or even negotiate down if you have been a good driver. This can be applied to many of your expenses, which might help you free up some much-needed cash.
Do not be afraid to look, ask around and take free offers; sometimes, these things might seem not to be trendy, but at the end of the day, you need to prioritize and choose long term goals over short term comfort.
Retirement Planning
Retirement is the time to relax and spend the extra time you have since you no longer have to work to do the things you enjoy. Knowing what you are going to do in retirement is a necessary part of retirement planning. This will allow you to figure out and accurately estimate the amount of money you will need to do the types of things you would like.
If you begin your financial retirement planning early, you can make sure you’ll do all the things you want to. And if you stay disciplined to your plan, you could certainly enjoy the reward of early retirement like so many others have done.
Embrace Frugality
For many of us, we always have these sneaky expenses that come up, and if you ignore them, you can end up not knowing where your savings will come from. With an honest look at your expenses that we talked about earlier, the next step becomes finding ways to save some cash. Sometimes this evolves into a frugal lifestyle. For example, if you eat out once or twice a week, maybe you do that once a month instead. If you buy lunch at work, perhaps you start packing it.
Look for and use coupons when grocery shopping, drop your cable bill, and join the cord-cutting revolution. Every little bit of money helps, and before long, you will realize that you can save some money for that emergency fund or even retirement.
