Creating a financial plan and sticking to it is one of the best choices you can make for yourself. Whether your plan is aimed at retirement or other personal financial goals, having a focused, goal-oriented system in place can deliver the confidence you need to stick with it. Still, in your rush to throw together a financial plan there are some things you may overlook or leave out that can be detrimental to your success, or at the very least your enthusiasm.
Here are 3 tips to keep you on track and beyond with your financial plan:
Maintaining Your Success
Oftentimes individuals are so focused on the grand goal that they fail to consider anything else. This is especially true for those who aspire to a specific net worth goal or even a particular retirement nest egg target. Reaching either of the aforementioned goals does not suddenly make all expenditures fade off into nonexistence. Cash flow and income remain an important factor in maintaining your success. Having an additional plan in place for the day you achieve your major goals can keep you from simply spending down your accomplishments. Financial planning for your retirement without including smart steps for the day your monetary target is reached can be even worse. Longevity and rising costs can make decades worth of planning and saving useless without income. For any financial plan to succeed you must not only think about reaching the target but how to remain there once you've reached it.
While only working toward a single, long-term goal is admirable, it certainly isn't easy. Creating checkpoints or miniature goals along the way gives you something to look forward to and congratulate yourself on. Every long journey is simply a series of steps and acknowledging how far you've come at the halfway point will help you keep your eye on the prize. When it comes to any serious financial planning, focus on small, measurable goals that will eventually guide you to your end goal. There is a catch though, make sure your rewards for making progress don't include uncontrolled spending or else you can easily wipe out your accomplishment.
Til Debt Do Us Part
Marriage is a big deal and it binds everything together between you and your partner, including finances. This is important to remember, particularly if you married later in life and are well on your way to completing your goals. Financial baggage definitely exists, and being unaware of the true state of your partner's debt and finances can leave some nasty surprises just when you thought everything was going perfect. Honest and open communication about money matters is important, as just chugging along unaware with your pre-marriage financial goals is unwise. While you may not need to start from scratch with your financial planning process, you will need to take into account the existence of another person in the long run, particularly in single-income households. With money matters being a significant source of divorce and marital problems, tackle this issue as early as possible to avoid serious problems in the future.
Financial planning is far simpler than most people imagine when they first encounter the term. However, it is easy to make mistakes and overlook the important steps needed to keep your plan going smoothly. Just as with any other life goals, acknowledging and rewarding yourself along the way will help keep you moving forward. Avoid pitfalls that are the result of being blind to all else when chasing your goals, as some of these "distractions" along the way are financially impactful. For financial planning and retirement planning services, contact the BD Financial Concepts team today.
We are a professional financial services firm located in Sanford, Central Florida.