When you hear the words 'financial planning', you may think that this is something which only large corporations need to do. However, financial planning is also an important part of everyday life. Below is a guide to 3 things you should consider when making a financial plan.
Saving for retirement
Everyone hopes to retire at an early age so they can make the most of their life. However, in order to do this, you will need to plan ahead and organise your finances. A financial planner can help you to save for your retirement by drawing up an investment plan in low-risk stocks and shares. They will also be able to help you to calculate how much money you will need to save and invest in order to achieve the returns you need to live comfortably. Finally, a financial advisor will be able to assess your tax arrangements to ensure that you are not paying too much in tax and that you are claiming any tax relief to which you are entitled. Ideally, you should periodically review your investment portfolio with your financial advisor so you can assess if you are on target to retire as planned.
Saving for significant life events
If you are planning to buy a house, send your kids off to college or to get married, the chances are you will need to save a significant amount of money. While you may be tempted to let money accrue in your checking account, doing so could reduce the amount of interest you will earn. A financial planner will be able to find a range of savings products which yield a higher return than a standard bank account which means you will reach your savings goal sooner.
Saving for a rainy day
Finally, a good financial plan should also include a rainy day fund. This fund is designed to ensure that you have a reserve of money which can be used in case of an emergency. It could be that you are out of work for a few months or that you need to pay for medical treatment. Having money saved for such events will mean you will not need to draw on your savings or to compromise your retirement plans.
If you would like further advice about how you can plan for your financial future, save money, and reduce your tax bill, you should contact a financial advisor and tax specialist today.
