5 Things Everyone Should Know About Financial Planning
Everyone means well. We all want to be that person who has everything organized and mapped out, especially when talking about budgeting and planning for retirement. The fact though is that most of us aren’t that person and we could use a little help with better understanding our finances and learning how best to make them work for us so we can retire with ease.
April is Financial Literacy Month and each week we’re highlighting different topics to help everyone improve their financial literacy and, hopefully, as a result the quality of their lives.
- What is Financial Planning?
So, what do we mean when we say financial planning? It’s a simple enough term, but there’s actually a lot behind it. Financial planning involves examining one's entire financial picture, understanding how all of the pieces fit together and then creating a series of actionable goals that are both short and long term. This encompasses strategies to get through tax season, saving for your kid's education, retirement and more. This is also a process best conducted with a CERTIFIED FINANCIAL PLANNERTM; someone who can sit down with you objectively to help you better understand your finances.
- The Time to Start is Now.
The truth is that it’s never too early to start laying the groundwork for your financial future, no matter where you are in your professional career. If you’re just starting out, don’t be complacent and think you have plenty of time and can wait. To truly set yourself up for success later in life, now is the time to start putting together your action plan. What this means will vary from person to person, but it could involve your employer’s 401(k) program and/or also creating and sticking to a budget. If you’re well established in your career but haven’t done a lot of financial planning, don’t panic. You have time but will have a different strategy from someone just starting out. What’s key is that you don’t waste any more time and get to work today.
- The Importance of a Budget.
Simply said, a budget is a spending plan that accounts for what you spend and make over the course of a year normally. If you've never created one then now is the time to start because they're essential when planning for the future. If you stick to it, a budget will help reduce frivolous spending and keep your savings or investments on track for the future.
- EVERYONE Should Have a Plan.
There’s a misconception that one has to have wealth in order to meet with a financial planner or even have a financial plan and that’s simply not true. Financial planning is for everyone, no matter their budgets. Some would say that financial planning is more important for lower-income individuals than the affluent because it helps properly allocate in-demand resources and increases potential savings for the future.
- Be Optimistic But Realistic.
Every year on January 1 millions of people vow to lose weight. By the end of that first week most have already given up not because they can’t lose weight, but because they were unrealistic about their goals. Don’t set a budget that is unnecessarily restrictive because you simply won’t maintain that level of financial endurance. Also be sure to take into account the fact that life is unpredictable. Plan for a broken-down car or a water heater on the fritz because some of these annoyances that life throws our way will happen. You won’t be successful if you’re not realistic, which is yet another way in which a financial planner can help keep you focused on achieving your goals.
No matter where you are in your career it’s never a bad time to start seriously thinking about your financial future. Stop by your local Sandy Spring Bank branch or give us a call at 800.399.5919 to learn more about how we can help you achieve those important goals.
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Questions? Contact us today at 800.399.5919 or visit a Sandy Spring Bank branch near you to discuss your banking needs.
This publication does not constitute legal, accounting or other professional advice. Although it is intended to be accurate, neither the publisher nor any other party assumes liability for loss or damage due to reliance on this material.