Financial planning and saving money for the future can be a scary proposition. Perhaps the prospect of planning for the financial future, retirement savings, or burdens that could be passed on to heirs and/or loved ones can prove daunting as well as overwhelming for some individuals. If so, this article could provide some sage advice to those individuals struggling with the idea of planning for the future. Here are some tips and benefits associated with financial planning, as well as saving money for the future.
1. Reducing Stress Level—Stress can be a killer and it can stem from many different sources such as a person’s home life, relationships, career, school, health, and finances, just to name a few. In fact, a recent report found that money remains the primary stressor for 72 percent of Americans, according to the American Psychological Association. Moreover, financial stressors have led this annual survey since its debut in 2007. This was prior to the 2008 financial crash that took the U.S. economy into its worst slump since the Great Depression. Therefore, there are several steps that can be taken to reduce a person’s stress level and financial angst, including saving a portion of their income in a separate account and/or limiting non-essential expenses.
2. Make Sure Bills Are Paid on Time–Late payments can harm an individual’s financial prospects in many ways. Some of the areas that can be hardest hit include a person’s credit score, ability to obtain credit, accruing fees, and penalties, as well as their ability to obtain a loan, buy a car, and/or home. One way someone can organize their financial obligations and make sure their bills are paid is to set up a digital or paper calendar to keep track of payment due dates, as well as construct a budget, in order to put more money toward paying off any debt. Moreover, this step can also help an individual organize their finances so that savings is an option included among their financial planning goals.
3. Communicate With a Significant Other and/or Loved Ones Regarding Finances–If there are arguments or disagreements with others about money, financial planning could be very beneficial for an individual’s peace of mind as well as their relationships. If someone keeps secrets about their finances from others in their life, there may or may not be cause for concern. While privacy and discretion are reasonable expectations in financial planning matters, many studies and polls have indicated that money remains a top predictor of relationship discourse as well as divorce. Moreover, financial matters can sour long-standing relationships, friendships, and/or partnerships. As a result, it is important to share information about all legal and financial issues, as well as exchange vital credit information when attempting to resolve money matters with significant others and/or loved ones.
4. Prepare an Emergency or “Rainy Day” Fund–To prepare for the worst-case scenario, it is recommended that an individual builds up their emergency fund to cover at least six months of basic living expenses. Many people also refer to this contingency fund as a “Rainy Day” account. While setting money aside for a rainy day can be difficult, it is an important habit to develop in order to secure a person’s financial future.
5. Develop an Additional Income Stream–One invaluable tip for financial planning and securing one’s future involves developing an alternate or additional income stream. These additional revenue options could include selling unneeded or unwanted items on eBay, Amazon, or some other online auction site. Moreover, there are several part-time, work-from-home job options to supplement a person’s income. However, it is important to verify such income options and make sure they are reliable as well as legitimate. Unfortunately, there are many scams and con artists out there that might try to take advantage of unsuspecting as well as vulnerable individuals. This extra money could be deposited directly into a separate bank or other interest-bearing account, which could help secure one’s future as well as provide money for incidentals and/or emergencies.
If someone is financially stressed and worried about the future, these concerns can be alleviated to some extent via financial planning. In particular, if a person is overwhelmed by concerns related to their financial circumstances, retirement savings, or burdens that could be passed on to their loved ones, this article will hopefully provide readers with some sage money advice and tips for securing their financial future. However, given the personal nature of one’s financial planning needs, it is up to the readers to be the judge.
Written and Edited by Leigh Haugh
Forbes–6 Financial Planners Spill: 14 Tips We Tell Our Friends
U.S. News & World Report–Retirement Readiness Calculator
Investopedia–10 Tips for Achieving Financial Security
Myrtle Beach Online–Practical Money Matters | 10 Reasons Why You Might Be Financially Stressed