5 Tips to Financial Planning And How To Get Started
Whether you’re rich or poor, financial planning is something you should be well versed with. We all interact with money every now and then in our daily errands. Whether it’s a loan you’ve taken or a salary you’ve received, you need knowledge on financial planning. Here are 5 tips on financial planning:
- Manage Your Debts
If you don’t set a plan in place to manage your debts, chances are that you will continue to heap up more debts and keep sinking deeper in that bondage. A good strategy to manage your debts is to first pay off the huge ones you have first like student loans, credit card debts, house and car loans.
Debt management also involves finding ways to avoid debts in future and you can do this by cutting down on your spend and completely cutting off spending on things that you really don’t need or can do without them. This is an effective financial planning tip.
- Plan Your Insurance Covers
Life’s events are unpredictable. Anything could happen at any time and change the course of your life. That is why you need to have an insurance cover for yourself and your family. You need to take into consideration getting health insurance, life insurance, homeowners insurance, car insurance, disability insurance and so on.
You can take up a cover in the form of an umbrella policy that covers multiple things all at once. Ensure that you properly define the premium amounts that you pay and the beneficiaries of the covers you take up. Insurance is a core factor in financial planning.
- Plan Broadly For Your Retirement
Life is dynamic and needless to say, you are aging by the day and a time will come when you will have to retire. As such, you need to invest heavily in your retirement if you intend to retire gracefully. There are several ways you can use to plan and save up for your retirement.
First, you can bank on the tax-advantaged retirement platforms such as the IRAs and Roth IRAs. Secondly, you can have your savings set on autopilot where you can have salary deferral to 401(K) plans, pay your mortgage, and use a checking account to make automatic withdrawals monthly.
- Plan Your Finances With Your Family
Money can affect how a family grows and how it turns out to be. You can easily predict that a family is bound to have serious issues if there is no transparency between family members on how money is spent. One family member’s hidden unaccounted for spending could potentially leave the whole family bankrupt.
Couples should take time to develop a vision board for how they want their future to look like, have financial goals, define their spending habits, and teach their kids good financial principles. This is an effective financial planning tip.
- Plan For Your Kids Future
Make financial decisions today that will positively impact your kids 10 years from now. Open up a 529 account for their college studies or set up a small investment account or a trust fund that will act as a safety net for them in future. These financial decisions you make today could positively affect their lives in future.
Money lenders can greatly help you access loans and plan your finances. To get you started, check out these Top 10 Money Lenders in Singapore.