Friday, January 20, 2017

Family Finance: 5 Reasons Why A Financial Plan Is Always A Good Idea

A financial plan is crucial to your future for peace of mind. It pushes you to look past the short-term and into your long-term financial goals, making them more attainable than if you didn’t think ahead. 

A common misconception is that only wealthy people need to have financial plans, however everyone benefits from thinking for the future. A comprehensive plan includes provisions for education, emergencies, savings, insurance, investments, and retirement. 

Luckily, there are professionals out there, such as those with the UBS-The Burish Group, that can help find the best financial plan for you. Here are five reasons that explain why a financial plan is critical to your family finances.

Establish Goals

Establishing goals allow you to know what you’re saving money for. You can establish a reasonable time frame to achieve them and determine if your goals are realistic. 

Goals tend to focus on education, becoming debt free or saving for a down payment on a house. 

They are realistic, but the timeframe in which you want to accomplish them might need to be extended once you start crunching the numbers.

Prepare for Emergencies

Emergencies are bound to happen. Medical, automobile and home insurance protect you from these types of problems, but other emergencies such as car repairs can throw the plan off track. 

You might not have enough insurance for your needs or have a deductible that is too high to realistically pay during hard times. Being prepared for unexpected events keeps your financial goals on track and ensures you don’t have a financial disaster.

Evaluate and Change your Financial Habits

Seeing where your money goes makes you more aware of your spending habits. You might realize how much you’re spending on eating out or on interest for your credit card debt. 

It might make more sense to pay more on your credit cards due to high-interest rates than it does to put extra in a savings account with a low rate of return.

Maximize Investment Earnings

Looking at where your funds are going aids in building up your savings and allows you to evaluate where the best potential is. 

If the rate of inflation is higher than your investments, you might need to move them from one type of investment to another.

Have Security in Retirement

Retirement isn’t as far away as you think. Utilize resources such as a 401k, especially if your employer offers a matching program. It’s free money and there’s no reason not to take advantage. Don’t rely on social security alone to fund your future.

Financial planning is a part of a responsible future. By having a solid financial plan you can make sure that you are ready for the unexpected and can have enough money for the things that you really want and need. 

This is definitely a great way to plan out your life just a little bit better so that you don’t always have to always stress about your finances. Getting a plan may seem like a lot of work, but it is well worth it for the peace of mind.

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