Retirement is just another word for that moment in your life when time is no longer money.
If you’ve prioritized financial security throughout your working life, this may sound like a silly joke (or a cringy one). If you haven’t prioritized financial security, however, it’s a warning.
All of us will reach an age when our earning potential dries up, and if we don’t invest in financial planning strategies before we get there, retirement becomes another word for anxiety. This is doubly true for those with children, whose financial concerns extend beyond their own, personal needs.
Estate planning is the best way to achieve long-term financial security. When you design your estate plan, you not only dictate who will receive your assets when you die, but you also set your finances in order. You’ll see a clear path towards reaching your retirement goals, while also ensuring that your life’s work will benefit your loved ones in the future.
A robust estate plan alone, however, will not secure your family’s financial security. Meeting long-term economic goals depends on making thoughtful short-term decisions. While working with a financial planner is your best bet for ensuring the future financial security of your family, here are a few tips to employ in the meantime:
Financial Planning Strategies: Taking the Short View on Enduring Security
1. Untangle Your Emotions
Money is a charged subject. You might be the type to indulge in the excitement of a new purchase, or you might be the type who would rather avoid looking at your finances than face the anxiety of doing so.
Regardless, you need to learn about your emotional relationship to money, and then find strategies to prevent it from impacting your decisions.
An objective lens is crucial for evaluating the impact of short-term decisions on long-term financial security.
2. Build a Budget
Keeping emotions out of financial decision-making doesn’t mean you can’t ever spend money in the name of joy. On the contrary, you can do so plenty…but only to the extent your resources allow. Figuring out how much you can afford to spend on simple pleasures depends on having a budget. Without this, you’ll never be able to truly treat yourself worry-free.
Step one of building a budget is listing all of your financial accounts and recording their balances. Step two is doing the same with all debts and step three is detailing all sources of income. Step four is tallying up your expenses and step five is sitting down and doing some math.
Once you know how much money is coming in and going out of your accounts, and what you need to retain to meet long-term goals, you can calculate your discretionary spending limit. Next time you’re out and unsure if you should do appetizers and mains, you can order worry-free because you’ll know buffalo chicken wings are in the budget.
3. Tackle Debt
Any good budget will tell you how much you can afford to put towards tackling your debt.
This amount should be every single penny beyond what you need to cover expenses and indulge in the occasional treat.
As long as your debt is out of control, your financial future will be, too.
There is no one-size-fits-all debt tackling strategy. Individual circumstances are just too complex. Everyone needs to have a plan to manage debt, though, and the sooner you acknowledge this, the brighter your financial future will be.
4. Plan Your Estate
We’ve already explained that estate planning won’t single-handedly ensure your long-term financial security, but that doesn’t mean it should be overlooked until later. A robust estate plan, put in place sooner than later, is a cornerstone of responsible, long-term money management.
To get started on your estate plan today or to address any other matter related to managing your finances, do not hesitate to contact the dedicated team at Caress Law either by calling (503) 292-8990 or using the contact form on our website.