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5 Tips to Plan the Perfect Financial Future

When we think of the future, we tend to think of a time when we’re comfortable financially and able to pursue the hobbies and adventures we’ve dreamed of all our lives. In order to achieve this goal, you need a financial plan. Unfortunately, personal finance is not something that we’re usually taught in school. This leads to a lot of guess work and, let’s face it, many of us make the wrong choices. To avoid the most common money pitfalls, follow these 5 tips to plan the perfect financial future.

Learn to Budget

As soon as you start making money, you should write out a budget to determine what goes where. Every dollar should be accounted for. Creating a budget doesn’t need to be as complicated as some worksheets make it out to be. Simply list all sources of income and add those together. Next, list all of your expenses. The expenses are subtracted from the income and, ideally, you’ll have money left over after all those bills are paid.

Start Saving

Speaking of left over money, that money shouldn’t be spent frivolously on clothes, a new television or the newest car. It should be put into a savings account, CD or invested in the stock market. If you’re the cautious type, you’ll probably feel more comfortable with a CD than in purchasing stocks. Savings accounts offer the lowest rate of return, but are a very safe option for socking that extra money away.

Consult With a Financial Planner

Do you know what your goals are and how to reach them? Financial goals, after all, are usually long term goals. A financial planner or advisor can help you set both short term and long term financial goals. He or she can review your budget, make recommendations for investments and see that your finances stay on course. Meet with your advisor regularly (at least annually) to reevaluate your financial goals and make any adjustments if needed.

Learn Self-Control

One of the hardest things for people to do is to resist the temptation for new things. We’re bombarded with commercials for the newest iPhone or Droid, the fastest car and the television with the flattest screen and clearest picture. When you work hard, it’s easy to think that you deserve those things and that you should have them. While this may be true, these are not good investments. A splurge once in a while can be good motivation, but splurges should not become regular events. Spend your money wisely to avoid getting into debt.

Plan for Retirement

From the day you start your first real job, even if you’re a fresh-faced just-out-of-college young adult, you should be thinking about retirement. Contribute the maximum amount that your employer will match to your 401k. Max out an IRA. Think about the life you want to live in retirement and plan for it accordingly. Your financial advisor, as mentioned above, can help you plan for retirement and other long term goals.

It sounds like common sense advice, doesn’t it? That’s because it is. In our consumerist society, it’s easy to forget what we were taught by our parents. If you work to save, your savings will work for you later.

Frank Mitchell has provided you this article on behalf of  http://www.cambist.co.za/.

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