Whether you plan to handle the job yourself or go to a financial advisor services firm for guidance, it's important to develop a plan for your future. To that end, let's review three financial planning tips that should be on everyone's minds.
Deal with Any Bleeding First
If you have outstanding debts that are eating you up, such as a high-interest loan or a payment plan with balloon payments coming soon, getting those off the books has to be your first priority. Even if you have to refinance those payments into a new loan, restructuring them or paying them off will do you more good than any amount of successful saving and investing can.
You should also go through all your expenses and find places where it is easy to trim. Do you need the 4K streaming plan on your Netflix? Probably not so trim it down and redirect the money into paying down other expenses and debts.
Improve Your Income
There's a cruel truth that not all financial advisors are willing to tell their clients. Not getting ahead today means you likely won't be getting ahead tomorrow. As scary as it might sound to do so, you probably need to get your income stream going right now. That means doing one of two things: asking for a raise at your current job or finding a new place to work that pays better.
Unless you already are working much less than full-time, it's unwise to start tacking on more jobs. Running yourself ragged is unlikely to be the answer. Remember, unless you're one of the top-paid people in a high-paying field, lots of folks who suck are making more money than you. Get paid better.
Itemize Your Long-Term Plans
Cutting debt, making more money, saving more and investing are all nice ideas and absolutely worth doing. They mean nothing if you don't have goals and metrics for figuring out how close you are to achieving them.
Sit down and write out your goals. This means just laying out whether you need to pay for an education, buy a house, develop a vacation fund or prepare for retirement. One of the main values of financial advisor services is that a professional can help you attach numbers and timeframes to your goals. You can then take some time each year to see how well you're doing in getting to your financial objectives.
Share19 November 2019
I still remember the day that my wife and I bought our first home. We were excited about filling the place with new furniture and looking for great area rugs. Unfortunately, before we knew it, we found ourselves deeply in debt. It was difficult to dig our way out, but over the course of the next several years, we were able to make things right. I want to teach other people how to manage finances so that they can avoid the turmoil that we went through. Financial planning might seem impossible, but with a little practice, I know it can become second-nature.