By Solid Serenity Legal Solutions
How do you balance financial planning for the future with paying for your expenses in the present? While it often feeling like there is a finite amount of money coming in and a limitless amount going out, it’s important to take the time to evaluate what your priorities are when it comes to your money and how to make sure what you do with your income reflects those priorities.
(1) Develop a Budget
Developing a budget is the first step in preparing for the future financially. Knowing how much you have and how much you need gives you a better picture of where you can allocate money to meet your financial goals. Weekly budgets help you stay on track and nor become overwhelmed by too long of a commitment.
(2) Build Emergency Cash Reserves
Emergencies have a way of popping up at the most inconvenient times. Having cash reserves helps ease the burden of surprise expenditures. Your long-term goal is to have three months of household expenses saved up. This is a difficult hurdle but a rewarding one as it will mean no longer living paycheck to paycheck. A great way to start these savings is with a large lump sum like a tax refund or bonus check, then adding an affordable monthly amount to the account.
(3) Automate Savings
Whether your goal is to save up for emergency cash reserves or something else, a good way to build up your savings is through automation. By setting up automatic deposits to your savings each month, you’re setting yourself up for financial success.
(4) Pick Your Battles
It feels like you can never have enough income to weigh against everything demanding your money. Take the time to determine what expenses are in the Have-To bucket and what expenses are in the Want-To bucket. After You’ve taken care of everything in the Have-To bucket and set aside what you are saving, then go back to the Want-To bucket and decide what is most important to you with the money you have left over.
(5) Pay Down High Interest Debt
Paying off high interest debt should be a priority for the present and the future. Making a more manageable debt-to-income ratio should be a high priority for both your present financial state and your future financial planning.
(6) Plan for Spontaneity
Feeling like there are restrictions preventing you from having fun can be discouraging and negate the rewards of saving. Plan for spontaneity by setting aside a category in your budget for date nights or as a buffer to allow you to have money saved up so that you are ready if you get an invite or decide to take a trip on short notice.
(7) Find a Cause and Give to It
Surprisingly, giving goes a long way to helping with your own financial health. We are biologically wired to give and the endorphin rush that comes with giving to those in need makes us feel that we have more. And if you give in a manner that is more personal, the reward isn’t just being better off financially, but spiritually as well.
If you need help planning for your wealth and financial future, reach out to trusted wealth planning advisors, such as attorneys, financial planners, and insurance agents today!