Life planning for success can be an overwhelming process to tackle, as trying to think ahead about things like moving your family to the right neighborhood, setting financial goals, saving for retirement, costs of raising children, and other items can be complicated and intense.
There are numerous considerations to factor into these types, like planning for success decisions. Luckily, there are some great resources available that can provide assistance.
Tackle the planning for success process sooner rather than later
Although it may be difficult to face, starting sooner rather than later is key, and taking the time to set goals and strategies in one’s 20s versus later on can have a big impact down the road. Quicken recommends taking some time to set planning goals. These will vary from person to person.
Novices to life planning will want to think through long-term goals as well as short-term desires, and prioritize those goals. Is paying for the college education of future children a priority, or is taking regular vacations, saving for retirement, living in a certain community, or driving a certain type of car the goal?
Keep in mind that life planning involves not only prioritizing expenses, but furthering your income with an investment property, stocks, bonds, or earned interest from bank accounts. Setting priorities will drive the strategies needed to hit those goals.
Tracking current spending can provide key insight during the planning process
Experts recommend spending some time tracking one’s current spending before trying to set a firm budget, as it is important to take a look at where the money is currently going before creating a plan for major changes.
It can be difficult to find a balance between enjoying life day to day and accomplishing bigger life-planning goals. Focusing on fixed costs and tailoring the variable expenses to fit a moderate budget after that can be an effective strategy.
The Balance points out that tackling life planning early on in adulthood can set the stage for big rewards down the road. Setting a budget and focusing on long-term financial goals can reduce wasteful spending, provide clarity on priorities, and provide the opportunity to save significant amounts of money compared to what you can save if you start later.
Investing a moderate amount of money can pave the way to garnering a sizable nest egg by retirement, and those who start later find it hard to catch up even if they are able to invest higher amounts along the way.
Utilize options such as 401(k) and 529 plans for long-term savings
Many families utilize plans that can provide significant tax advantages or provide security in case something unexpected happens down the road.
For example, employers often provide access to a 401(k) plan or something similar, which can be a great tool for saving for retirement-related expenses such as downsizing to a smaller home to be closer to family or to reduce your mortgage.
A 401(k) can also help you pay for the associated moving costs (make sure to compare rates before hiring movers).
In terms of saving for a child’s college, 529 plans have become quite popular, and as the U.S. Securities and Exchange Commission site notes, they not only help build up savings to pay for college down the road, but they provide tax advantages as well.
Additional opportunities via an employer may include life and disability insurance, which can be an important component in life planning for success to provide stability for families.
While there are many ways to tackle life planning for success, turning to a financial planner may be a wise investment. Friends and family members can be good resources for referring someone experienced in helping with this type of planning.
Creating solid life and financial plans for one’s future can be overwhelming and complicated.
Putting together some basic strategies like starting early, tracking spending, and utilizing opportunities such as 401(k) and 529 plans as well as employer-provided insurance policies when available can go a long way toward building a successful strategy.