Planning for a Sound Financial Future

Planning for a Sound Financial Future

Regardless of your age or where you are along the path of your life, one thing is certain—you are constantly moving toward your future. And if you want those years ahead to be as comfortable as possible, then now’s the time to implement a solid finan

Published Tuesday, July 15, 2014

Regardless of your age or where you are along the path of your life, one thing is certain—you are constantly moving toward your future. And if you want those years ahead to be as comfortable as possible, then now’s the time to implement a solid financial plan.

 

Make the Plan

Creating a financial plan requires a close look at your current financial situation as well as setting short-term and long-term goals that are realistic and trackable. Understanding where you are right now is just as important as deciding where you want to be down the road. You’ll need to evaluate such factors as your cash flow versus expenses and your net worth (the value of your assets) versus your liabilities or debt. Keep in mind you should always have more money coming in than going out and your assets should always be greater than your liabilities.

Investments
Once you have a plan, you’ll want to develop an investment strategy for your money. Stocks, bonds, and cash equivalents, such as checking and savings accounts, certificates of deposit and money market accounts, are all viable investment options. The most successful portfolio, however, is one that offers balanced diversity between all three types of investments.

Tax Savings
Researching and implementing legal ways of lowering your tax burden each year will also help you reach your financial goals. Tax-deductible contributions to IRAs, 401ks, HSAs, and other savings plans are excellent ways to save money for the future as well as each year on your tax returns.

Estate Planning
If you’ve always thought estate planning was something only the really wealthy do before they die, think again. Estate planning is an essential part of your overall financial plan, as it is designed to protect you and your assets while you’re alive. Estate plans also control the distribution of those assets after you’re gone. This kind of planning can be as simple as drawing up a will if your estate is small and you just want to make sure certain people receive certain assets of yours. On the other hand, a more sizeable estate might require a trust in order to minimize or avoid hefty taxes. 

Insurance and Health Care Costs
While it’s difficult to plan for unforeseen and sometimes catastrophic events, having the right insurance can provide peace of mind should something happen. It’s important to make sure you have the right amount of coverage to protect you against financial distress in times of unexpected hardships and adversities. Consider insurance coverage in the following categories as part of your financial plan: life, disability, auto, and homeowners.

Health care expenses are another cost to factor into your financial plan. Even if you have health insurance coverage now and you’re thinking Medicare will cover you when you turn 65, you’ll also want to have a backup plan. Medicare and Medigap policies only pay a portion of health care expenses. You will still be responsible for certain costs including co-pays, deductibles and some medications. Out-of-pocket medical expenses can wreak havoc on your retirement savings if you’re not prepared.

These are just some basic guidelines to follow when planning for your financial future. For more detailed information on implementing a financial plan, please visit the following websites.

www.360financialliteracy.org

www.balancetrack.org

www.aplaceformom.com/blog/12-04-15-financial-planning-tools/

www.estateplanning.com

http://money.cnn.com/magazines/moneymag/money101/

http://www.fa-mag.com/news/healthcare-planning-a-growing-opportunity-for-financial-advisors-13510.html

 

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