With the onset of New Year, it becomes a huge task to re-create or modify your financial goals for a better saving. Everyone gear up to plan their financial goals so that the upcoming year yields better results than the previous. If you’re a beginner, then you might be baffled with where to begin.
Here are 8 financial planning tips from the leading financial planning thought professors and leaders that can guide you to take your financial planning to a noteworthy stage.
8 expert financial planning tips for a financially secure future:
Boost up your retirement savings:
The best thing that would make you financially secure is having enough savings in your retirement account (401(k) or IRA). There are simple yet powerful ways to boost your retirement savings.
Professor David Littell from the American college of Financial services, shares the 3 secrets to maximize your retirement savings. They are:
Secret 1:Put your savings on autopilot
In order to auto-transfer a part of your money towards your saving, you can choose from options such as paying down a mortgage, automatic monthly withdrawal from your checking account or salary deferrals to 401(k) plans.
Secret 2: Fully utilize the tax
Utilize the advantaged retirement vehicles such as IRAs and Roth IRAs to the best extent possible.
Handle your debts wisely to become debt-free!
Each one of us wishes to be debt-free but might not have a strategy to work on. If you wish to stay clear of debts, then you need to have a strategic debt management plan. The debt management plan includes paying off the most expensive debt first and then followed by the less expensive ones.
Look for long-term investment plans
As stated by Professor Robert R. Johnson, President and CEO, The American college of financial services:
“Success in investments is a marathon and not a sprint.”
In the initial stages, you might look for options to get immediate return which is actually quite difficult. Firstly, you need to have an investment strategy and stick to it irrespective of the market conditions. The success in stock markets can be achieved by showing up and sticking to it for the long-term.
Engage your loved ones in money matters
It is always good to have transparency in any relationship especially in the context of money matters. Hiding financial secrets can have a negative impact on your relationship. Building a shared financial vision about future goals can strengthen your relationship and it would become easy if you have extra contributions to it. As a parent, take time for your kids to teach them about handling money as this can be a foundation to their upbringing.
How about reallocating your investments?
It’s never too late to reallocate your investments. If the current plan doesn’t work well for you, it’s no harm to try a different option. Keep an eye on the market trend and update your investment portfolio accordingly.
Review your insurance coverages
When did you review your insurance coverage last time?
If you haven’t thought about it, do it now and often on a regular basis. It is always better to ensure if the coverage amount is still consistent with your original needs. You need to review all the insurances that you have enrolled yourself in such as life insurance, health insurance, car insurance, disability insurance and house or any property insurance. Insurance is one of the crucial factors for a financially secure future.
Find ways to maximize your flexible spending accounts(FSAs)
Most employers offer a range of flexible spending accounts (FSAs) such as dependent care costs, medical expenses etc. It would be wise of you to make the best use of these options and grab it once offered. The best thing about saving in these accounts is that there is no tax for this money. So, start looking for ways to maximize your FSAs so that you can save thousands of dollars in tax savings.
Don’t neglect your estate plan!
The 2 key factors in comprehensive financial planning are estate planning and emergency planning for families. Every one prepares for the emergency and saves some amount as emergency fund. But why neglect an estate plan? I might sound quite depressing to prepare in advance for premature death planning. But what will happen to your family needs and will there be any assets to take care of your final expenses along with your family needs.
Summing up
A proper workable plan is a powerful tool in financial planning. We have shared quite a few important tips that would help you build the right plan towards a financially secure future. The motto is simple try to clear debts fast, automate your savings and calculate all expenses.