When you’re young, saving might be the last thing on your mind, but establishing a financial plan is one of the greatest gifts you can give to yourself and your future.
By taking control of your finances now, you can change your life for the better. Not quite sure where to start? No problem. Bernard Kiesel, CPA, CFP20 put together the following tips so that you can start planning now, rest assured, to have a better handle on your future’s financial circumstances.
- Start Right Now
When it comes to saving money, time is your friend. The earlier you start, the more interest, dividends and growth you earn over the life of your savings and investments.,
For example, if you started saving $500 every month at age 45, assuming a reasonable rate of return, you would have approximately $230,000 at 65. If you had started the same practice at 25, by the time you turned 65, you would have over a million dollars. The sooner you start, at any age the more you will have when you want and need income or funds, so don’t delay.
- Set Your Goals
Every financial plan should be informed by goals, so you need to decide what you’d like your life to look like 10, 20 and even 40 years from now. If you want to make a large home purchase at some point, that needs to be factored in. If early retirement is a goal, you need to plan for it.
Make a list of the expenses you’d like to save for, that can give you the life you want. Research how much each is likely to cost you so you can have hard numbers to work with.
- Budget for Emergencies
For many families, one unexpected expense or layoff can put a wrench in savings. Prepare ahead of time by delegating money to an emergency fund as soon as possible. Start small if you need to, $500 or $1000, then build it up to a month’s worth of living expenses and eventually six months’ worth. When trouble comes, you’ll be prepared and will take less of a hit.
- Track Your Money
Budgeting is essential to sound financial planning. If you don’t know what money is coming in and going out each month, keeping on top of your savings and investing game is going to be nearly impossible.
There are many budgeting apps and systems available that can help you keep track of your money, even when you’re on the go. You can also create a budget yourself by going through your bank, credit card and investment statements and categorizing expenses.
When using an app or your own investigation into your money, look for trends in spending that you can adjust to save and invest more now so that you can enjoy more freedom later.
Partner With A Top Financial Planner
When it comes to both your financials and your future, don’t leave things to chance – and don’t let more time pass before you get your finances on track. KDK Accountancy Corporation and Bernard Kiesel, CPA, CFP has helped many small business owners, families and individuals create plans for their future by evaluating their current situation and providing customized solutions.
Contact Orlando CPA online or call us directly at (407) 759-5363 for a free consultation to begin planning for your future today!