When you’re developing a financial plan, it’s important to remember that one size definitely doesn’t fit all. Different family and income situations require different strategies to reach your financial goals. Here are some factors to consider when developing a financial plan.
Age
If you are in your twenties or early thirties, you have more time to save for your dream, whether that means your perfect house, early retirement, or world travel. It is important to start planning your finances early, so your savings can grow as much as possible. People in their thirties, forties, and fifties will need to save more aggressively for what they want, but with careful budgeting and investment, it can still be done.
Income
Savers who earn less and have less money to spare will need to adjust their saving plans. It’s important to set aside as much as possible, but you still need food, clothes, and a place to live. You may want to consider higher-yield investments to increase your return or change your goals. If you have a more generous income, be careful not to spend it all on lattes and luxury cars. Establish a budget for yourself and stick to it.
Family
Families clearly have to budget differently than single people. Feeding, clothing, and caring for kids takes money, which can mean less saving. If you have kids, keep in mind that you may not be able to afford many unnecessary expenses. It is also important to start college funds for your children. Consider establishing CDs or investment accounts to fund your children’s future.
Though you can develop your own budget and savings plan, you should consult a financial planner before making any major decisions. He or she can help you decide how to allocate your funds to reach your goals. Plan & Act is an independent financial advising service. Let us help you make the most of your money. Contact us today at, (720) 897-7966.
As children, when we are completely dependent on our parents, concepts such as financial planning, money management and financial security don’t mean much. Yet most of our beliefs about money are fairly established by the time we are approximately 12 years old. These beliefs are based on a number of factors, including the financial status of our family, the economic climate in which we have grown up, and our parents’ way of dealing with finances.
Our first practical encounter with money often begins when parents provide us with an allowance. Along with that allowance, most of us will usually receive a piggy bank, or even better, a savings account in the family’s bank. We are encouraged to “save” our money. At this point, money has an actual value, and the words “money management” begin to take on some meaning. Add a simultaneous increase in personal freedom to the equation, and the possibilities can seem endless. It is at this time that our future attitude towards money matters becomes more clearly defined.
Some of us revel in the money-equals-freedom formula. We live for the day. Adults of a certain vintage may recall arcade game marathons followed by fast-food feasts. Perhaps some of our friends were more frugal with their money. They likely didn’t use the words “financial planning” or “money management”, but that’s precisely what they were doing. Maybe they were saving up for a special purchase. Others may have simply enjoyed watching their money add up, admiring the potential value of their growing funds. Merely having a piggy bank or savings account gave them a sense of financial security.
Teaching Your Children About The Importance of Financial Planning
Our attitude towards “financial planning” changes during adolescence, usually as a result of getting our first job. Going to the movies involves a financial sacrifice. We begin to put our money belief system into action, and this requires some small-scale financial planning. This is where parents can help. Many parents, however, are hesitant to discuss financial planning with their children. Studies reveal that:
- A majority of parents feel less prepared to talk to their children about money than they are to explain “the birds and the bees”.
- Only a small percentage of parents have explained to their teenagers how credit card interest and fees work.
- Very few parents are cognizant of the fact that learning about money management should be a priority for their adolescent children.
If you are a parent, look for opportunities that allow you to explain financial concepts using real-life situations. Try to lead by example. Encourage your children to help out with the planning process so they understand the value of money and the importance of having a sound financial plan to achieve their goals. They’ll be indebted to you and it will become an enjoyable experience for all!
Financial planning is essential for every individual and family. How much or how little we know about money directly affects our quality of life, now and in the future. If you’re a recent graduate or have just started your career, Plan & Act can start you on the road to financial independence. Regardless of your current financial status, you can get started with one of Plan & Act’s Free Financial Assessments and then continue on with a personalized financial plan down the road to help you reach your goal of financial security and stability.
* Plan & Act is a registered Fiduciary Financial Advisor. This ensures the financial advice you receive from us is objective, unbiased, and protects your financial interests.
Avoid making financial missteps that could compromise your future by enlisting the affordable services of Plan & Act. We are an online financial service solution geared toward helping individuals make sound financial decisions and investments.