Good Financial Planning Will Help You
Finances will be with you throughout your life so some effort to utilize good planning is well worth it.
By Leland E Pulley
Many people today are having financial problems for a variety of reasons. No one seems to be immune. It can happen to us, as well as anyone else. I think each of us knows someone who is experiencing some type of financial problem currently. For everyone, the bills continue to come in and the cost of living continues to go higher. What can be done to make it through these tough times and be prepared for any future economic problems?
There are some major variables that affect all of us.
In the United States the federal government cannot seem to live within its means. The national debt continues to rise, and ultimately someone is going to have to pay for this. States are having a hard time trying to balance their budgets. Our government is in trouble.
People lose jobs, often through no fault of their own. One reason is because jobs are being sent overseas where labor is cheaper. Unemployment varies over the years, and no one seems to have a good way to maintain it at a low level over many years.
Related to employment is higher education and job training. Unfortunately, college costs have become unaffordable for many people. Less people can get the education required for the types of jobs needed in a technologically advanced workplace.
When financial problems occur, people are trapped in homes with mortgage payments they can no longer afford. This is one reason why foreclosures occur.
Many people lack adequate medical insurance. When medical problems occur, they simply cannot pay the bills associated with their care.
Credit can be tight or hard to obtain for some individuals. Banks seem to be lending money primarily to those with the best credit scores and thus people who need help the least.
There is always the possibility of illness and accidents. Either one can seriously affect employment and income, and thus family finances and the ability to pay bills.
If anyone has problems in paying bills and meeting expenses, it soon shows up on their credit reports. Lower credit scores work against people by limiting the types of help they can get.
Dreams of retirement are fading away as more people approach the age of 65 and realize they are not prepared for it.
Unfortunately, these variables are not going to go away any time soon. They represent long-term challenges and problems.
It is no wonder people are concerned about their jobs and the ability to take care of themselves financially in the future. In most families, both men and women are working. Neither husband nor wife wants to leave the work force too long for parenting or other legitimate reasons. They fear that their job will not be waiting for them when they return. They may get a job again, but at a lower wage. During their time away from work, they will fall behind their peers who kept working. Upon returning to work they must learn new things and upgrade their job skills to catch up with their peers and be competitive again.
Money does matter for each of us. It can do a lot of good and a lot of damage in our lives. Lack of it can cause people to become depressed, frustrated, dishonest, angry, or even disobedient to the law. I have experienced financial strain, and it had an impact on me just like it does on others. How much of an impact and how long of an impact can vary with the individual, but money affects all of us. It affects our opportunities, our solutions to problems, and our ability to get assistance when needed. It allows us to get more education and job training, live in a better neighborhood, and have more free time. In essence, money can do essential things for us and provide the means for a better lifestyle too.
Now let us consider some things we can do to financially get our lives in order and be better prepared for the future.
Do not presume that your job will last forever. Your company can go out of business or ship jobs overseas or reduce its work force for a variety of reasons. Therefore, continue to learn and upgrade job skills and keep an up-to-date resume. Be prepared to sell yourself in the job market tomorrow.
Housing is only worth what you can sell it for. It does not matter what you paid for it or what appreciation you expected over the years. Housing also takes time to sell, so if you need to get money out of your house for living expenses or move to a new area, the equity in your home may not be obtainable for months.
Prepare a reasonable family budget and live within it. Control spending or do not spend more than you must spend. Review your budget at least once a year.
Have some emergency savings in your home, or in a bank, which you can utilize for unexpected events. As a younger adult I thought savings would be good, but I could do this later in life. Big mistake! Consider savings as payment to yourself for all your hard work. Even a small amount per month will add up over time. Remember, you do not know the future or when savings will be needed.
Avoid unnecessary and excessive debt. This can work against you in times of unemployment or underemployment. If you do not have the money to buy a lot of consumer goods with cash, then go without them until you can pay for them. This avoids running up large bills through loans or credit cards.
Do not have several credit cards. This lowers credit ratings. It tempts you to spend more too. When you do seek a credit card, shop around for the best deals you can find. There is a lot of competition between cards, so seek the best deals for you. Be aware of the high interest charged by these cards. Cash advances have higher rates than purchases.
Loan consolidation is a useful tool. You can obtain a sum of money at a reasonable interest rate. Then use this to pay off some smaller and higher interest rate debts.
If you can, get some investments. These can accumulate wealth over the years without you working for it. For example, we own stocks. Also, we have been trading stocks for years to obtain extra income. Others utilize bonds. You may own rental property and lease it out to tenants. You can collect valuables like gold which you expect to increase in value over time. You can start making and selling goods over the Internet to supplement your main income.
As you get older and your kids have left home, begin to scale back or downsize your housing, the number of cars you own, and other major expenses. Doing this will help you to live reasonably well in your fifties and sixties and yet have more money to spend in your seventies and eighties.
Consider the next five years and then ten years. What needs will you and your family have, and how will you meet them? Will increased income be necessary, and if so, how will you obtain it?
Think about retirement and develop a plan for being prepared for it. Consider some wise investments that will accumulate wealth over the years. Have some savings. These should supplement things like company retirement plans and Social Security.
Other things could be added to this list. It should demonstrate the types of things to consider, evaluate, and then act upon. Do not leave your finances today or tomorrow to chance or good luck, or to circumstances beyond your control. Take charge now and be prepared for your own future. Seek financial advice from others with more knowledge and experience than yourself. It does not hurt to seek counsel. You are not obligated to utilize it.
Very few of us want to admit that we have financial problems or could develop them in the future. We do not like to be told that no one is going to pay our bills except ourselves. It is easier to hope that we can win the lottery, or the government will bail us out, or the banks will forgive our loans, or family members will come to our rescue. In general, such things will not happen. We must be prepared to solve our own problems. Others can help us in various ways like providing advice and rendering service. Family members like adult children may even allow us to live with them when we are older. However, they may be having problems of their own at that time.
The best approach is still learning to take care of yourself financially. Do financial planning for both the near term and long-term future. Then act according to your plans and modify them as necessary as you live each year of your life. Make sure these plans have actual numbers associated with specific goals and timetables. Without actual math, plans are not as practical, realistic, and usable. As you follow your plans and see that they are helping you today and meeting your goals for tomorrow, you will gain confidence in yourself and your ability to take care of your financial needs. You will feel more enlightened and empowered. This will motivate you to continue along your pathway and have more financial success over the years.
One last word of encouragement. If you already have serious financial problems, do not give up. Do not throw your hands up in despair. You are the one who needs financial planning the most. It can and should start now to help you get out of the mess you are in. It will help you resolve your problems faster and with less pain in the process. So be optimistic and start planning. Progress will be made towards a reasonable solution and ultimately a better and more secure financial future.
I challenge you to develop a financial plan if you have not done so. If you have some financial plans, review them periodically to keep them up to date. Continue to implement your plans and work to improve them. Your skills in planning will improve and your plans will become more accurate indicators of your current situation and your future also.
If you enjoyed this article, you can find more content like this under the Topic Categories link. We also look forward to our readers input, so please leave a “like” or a comment.