People who lead busy lives have a lot of things to manage. There are family responsibilities and work obligations constantly competing with one another. It’s not surprising that things like financial planning often fall by the wayside. Here’s how to keep your financial planning on track all year long.
Cash reserves are a must. Think about the numerous unexpected life events that could surface at any time. These stressful events usually have a hefty price tag attached to them. In order to be adequately prepared for anything that comes your way, consider setting up a savings plan to build up your reserves. Shoring up your savings for the unexpected is prudent.
Check on your retirement contributions. You may have set aside a savings goal for the year. Each quarter, set aside time to check in on your 401K or IRA. See if you are hitting your marks in terms of retirement contributions. Adjust up if necessary to ensure that you are maxing out your retirement savings.
Outline your specific financial goals for the year and make a plan. Although having a big picture in mind is theoretically a good thing, but having specific details outlined in writing makes it easier to commit to the plan. The plan should include the steps it will take to achieve those specific goals. Automate wherever possible by contributing automatically to savings and retirements with each paycheck.
Re-budget if necessary. If there are some scenarios that have changed your personal economy recently, be sure to re-budget to meet your new set of needs. You may want to change your budget to reflect more ambitious goals. Whatever the case, be sure to save to create your budget again to identify potential areas for improvement.
Assess your cash flow. You may be spending money monthly without thinking about the various ways you could boost your cash flow. Could you be putting even more money aside? Could you identify additional ways to boost your income? Are there some cuts that could be made to realize additional savings? All of these questions could help you discover opportunities to increase your cash flow.
Avoid the noise. You can be inundated with negative messaging if you’re not careful to monitor what you see, hear and interact with on a regular basis. If you are happy with your financial goals and the plans that you have set, be sure to stick to those very plans. Being rooted in a particular plan is the only way to advance your goals financially.
Revisit your asset allocation efforts. You may be exposed to more risks than you realized and may find that adjusting how your funds are allocated could be necessary for better managing your risks. You may have a mix of volatile stocks that are too aggressive for your taste that may need to be scaled back. Change your asset allocation to manage the risks that you are most comfortable with long-term.
Adapt your financial goals to meet a lifestyle change. Change is a part of life. What may have worked for you previously may be something you don’t want to continue in this new season you are embarking on in your journey through life. You may have new goals, dreams, and desires. Your financial plan needs to reflect that. You ultimately have to be happy with the outcome of your life, so take charge of your finances and make sure they are aligned with where you are in life. Keep focused on your future, so that you’ll encounter fewer problems remaining on track.
Financial plans are constantly adjusting to adapt to changes in your life. Make sure to document your goals and create a specific plan that will help you identify the appropriate steps to take to achieve those goals. Your financial plans should be revisited periodically to ensure that you are hitting your benchmarks as planned. The plan is your compass, and it’s important to make sure that you are constantly progressing.