Getting Back to Good Financial Health: Creating Long-Term Goals
Most of us are aware of the basics of financial management, but some are undeniably more interested in handling money properly than others. We all know the different types, from the frugal and disciplined money managers to those who willingly confess that they just aren’t good with money and enjoy spending rather than worrying about saving.
The key to a life of good financial management is often said to be in starting young. Learning to manage your money may have been instilled in you by your parents, beginning with an allowance they gave you in exchange for chores. You probably learned the rudimentary methods of establishing a budget when you discovered there was something you wanted and that you could indeed have it if you saved. Moving into the 20s and 30s, we begin to be motivated by career goals and higher salaries and benefits, affording large-ticket items like cars and homes.
But even if you have been on track financially to begin with, there are many things that could have thrown you off course, from an illness to a gap in employment to perhaps a bankruptcy for a home or business. As soon as you can, however, it’s time to begin planning and get back on course. This takes some effort, but is much easier if you have a plan in place along with the motivation of realizing how great the reward is for your future.
- The first element of good financial health is to have more income (substantially more, if possible) arriving than going. And if there is too much going out, consider how to stop the financial bleeding by listing all your bills and looking at the extraneous ones that can be cut. This may not hurt at all; in fact, you will probably find that it feels good as you stick to your plan and see results.
- Once you have an idea of your finances, draw up a disciplined budget, but if possible do allow a moderate amount for recreation—as well as a cushion. This way you have a firm grip on getting bills paid as well as giving yourself permission to relax every now and then with a movie, dinner out, and a few new things.
- Save for retirement. This may be an area you’ve stopped and started with before depending on what’s been happening in your life, but if you can save ten percent of your income, you are off to a good start. Does your employer offer 401K, and even more importantly, do they offer matching? If so, that’s always a good opportunity, essentially offering you free money.
- Begin accumulating an emergency fund. This may also be a major key in helping you to sleep peacefully at night as it grows, knowing that you can handle a financial setback such as missing work, being laid off, or needing to switch careers. This also helps in the case of other surprises such as illness, an accident, or divorce. Try to have at least several month’s salary built up—but the more, the better.
- Motivate yourself with goals, and save toward them. Consider what it is you want for the future and outline a financial picture of how you can get there.
- Try to live below your means. It may be tempting to join your friends for that skiing vacation, or you might even want to invest in a second home or a timeshare at the beach or in the mountains. Is this really in your price range though, considering income? There are always other, more affordable options. Ask yourself if you are continuing to live below (or even just within) your means and remind yourself of your mission for financial health.
At Fitzgerald & Campbell, APLC, our goal is to see you achieve financial health. If you have outstanding debts and need to explore your options such as debt consolidation, negotiated settlements, or even bankruptcy, let our experienced attorneys review your case and suggest options. We are here to help!
Call us today for a free consultation at (844) 366-8693, or email us at firstname.lastname@example.org.
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