Many people meander through life with no thoughts on how their retirement will look. They don’t worry about buying a home and are happy to spend what little money they do have the moment it comes into their possession. There is nothing inherently wrong with this happy-go-lucky approach, but if things go badly wrong, you will be caught out big time.
Financial planning might seem like a boring topic, but it could save your bacon in the long run. By taking a few simple steps, you could gain control of your personal finances and secure a future for you and your family. So what are the key things you need to do ensure you have a secure financial future?
Get Your House in Order
In order to create a secure financial plan you can work towards, you need to make a realistic assessment of your current financial position. Make a list of any debts you have, including personal loans, credit card debt, mortgages, etc. Next, create a monthly budget of income and expenditure, which will give you an idea of how much you can afford to save each month.
To begin with, your number one goal should be to service debt. There is no point in putting money aside to save for the future when you are paying interest on loans. Mortgages are different, of course, but all other short-term debt needs to be paid off, so use what spare cash you have to work towards being debt free.
Once you are debt free, it is time to think about your medium and long-term financial goals. These could be anything from saving towards a college fund for your kids or even your retirement pot. However, you do need to be specific, as one person’s retirement is not the same as another’s!
Life is risky. You could be cruising along, enjoying your job, your home and your wife, when the unexpected happens: you are made redundant, the bank forecloses on your home when you can’t keep up with the mortgage repayments, and your wife is diagnosed with a terminal illness.
Nobody likes to think about such things happening, but they can and do happen. The best way to achieve financial security is to plan for the unexpected, so take steps to minimize the risks and protect your future.
As you move through life, your priorities will probably change. In your twenties, your priority might be to retire at 50, but kids come along and you realize you need to start planning for their future, too. The important thing here is to be flexible about your financial goals – and how you intend on achieving them.
Take Professional Advice
The financial sector is difficult to navigate without expert advice. Pensions, mortgages, and investment vehicles all require in depth knowledge, so it is sensible to consult with a financial planner Los Angeles such as JSF Financial at each stage of the process. They can help you achieve your goals, so you can take control of your finances sooner rather than later.