Four steps toward creating a financial plan, NOW!

The coronavirus pandemic has made all of us aware that the unthinkable can happen. We all are living lives very different compared to a few short months ago. What I wouldn’t give to sit in a crowded supper club bar, awaiting a table for the Friday night fish fry. This is slowly becoming possible again, with some changes of course. Adapting is what people are great at!

What this example demonstrates is that sometimes we are forced to do things differently. Lessons often are learned the hard way and through personal experience. This is especially true of financial planning. People are losing jobs, the stock market has been volatile, the future is always uncertain. Money deserves attention, and it’s up to you to decide if you’ll be in control, or if it will control you.

Planning is key to realizing your financial dreams, and it doesn’t have to be time consuming or difficult. It simply creates a road map that you can look to for years to come as you work toward goals. Having a plan also creates accountability and motivation! Here are some tips to get you started.

1. Identify what you want. You must identify what you want to achieve. Goals may include buying a home, retiring early, providing for a child’s education, or having more time and money for travel. Putting your goals on paper may inspire you to pursue them more vigorously.

2. Audit your finances. Conduct an audit of your finances so you can get a clear grasp of your current situation. Make a list of all of your assets, and then subtract existing debts to figure out your net worth. While you’re tabulating, find out how much you bring in and spend each month so you can get a clear picture of your spending habits. This will help you make smart choices in regard to spending and saving.

3. Eradicate existing debt. One of the key parts of a financial plan is to pay down high-interest debt to free up money for the future. Focus on paying off credit card balances, high-interest loans or balances for other accounts where interest is high. A debt consolidation loan may be worth exploring if you’re having trouble paying down high-interest debt.

4. Start saving. Building savings is essential to reaching many goals. It also is key to help avoid financial ruin during emergency situations, such as home or car repairs, disability that takes you out of work, etc. Start small by having a certain percentage of money deposited into a separate account automatically. Then watch it grow. Investing in the right products also can help you grow your savings.

A financial plan can be developed and implemented all on your own, but if you need guidance, many financial advisors help by offering this service. Whether you’re being proactive or reactive, your plan is bound to benefit you now and into the future!

The views expressed represent the opinion of Uncommon Cents Investing. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment.  Investing in equity securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. Past performance is not indicative of future results. Investment advisory services offered through Uncommon Cents Investing, a registered investment adviser.

The Insiders: This article is sponsored by Uncommon Cents Investing

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