Financial planning is key to reaching your goals. You may be asking, what does it mean to create a financial plan? It is outlining a plan of action that will benefit you presently as well as long-term. This may seem like a daunting task but resources and professionals in the field can help tremendously.
This year may have shown us areas where we can tighten our financial strategies. Maybe your financial situation felt pretty bleak. A survey conducted by Lending Tree highlighted that throughout the pandemic 42% of Americans cried regarding their finances. You are not alone on this journey to financial health. Some employers provide assistance such as: financial advisors or coaches, tools, education, and finance apps. Additionally, employers may match your contributions to your emergency savings or retirement or assist with loan repayment. If you want to get a jump start on creating your financial plan and reaching your goals it is highly recommended that you seek what resources your employer has to offer.
Although it is difficult to prepare for the unexpected, financial planning can help ease the burden and stress. Building a financial plan brings a sense of motivation. Consider the goals that you want to achieve, your current amount of debt with interest, and your income sources. Emergency savings and retirement savings are two measures that you can use when financial planning. It is suggested to have at least 6 months of emergency savings, meaning that if you lost your income you have enough savings to survive for 6 months.
Remember, it is one thing to create a goal but it is another to actively plan the steps you will take to achieve it. Goals should be SMART: specific, measurable, action-oriented, realistic and time-bound. Taking these measures can help ensure that your goals are concrete plans and not just ideas. With all of the uncertainties that surround us, having a financial plan is one way to take control of your future.