As an adult, saving money is your responsibility, not your parents’. However, with bills and other expenses to pay, saving money becomes more difficult. Fortunately, there is a solution to help keep your finances in order with your expenses in mind: financial planning. However, there are important things to focus on during the planning process.
One of the most crucial aspects of proper planning is investment planning. This is when you create clear-cut financial goals and then compare those objectives to your financial resources.
Investments can include many different things such as property, equities, bonds, cash, and stocks. Please note, though, that investment planning never guarantees that you will make significant gain or that you won’t deal with financial risks through your investments.
Besides emphasizing your future investments, it’s crucial that debt management is also touched upon through your financial plan. After all, tackling one’s finances does involve not just current and future expenses and goals but also past payments that are still due.
Through debt management, one’s financial advisor can decide based on their client’s current expenses how their debts can best be managed, how much will be spent monthly to tackle these debts, and of course, if any current luxury expenses should be cut to pay back debts in a timely manner.
A financial advisor can even help you get lower payments or interest rates to assist you with paying back your debts.
Life Insurance Assessment
It is also integral that part of your financial plan includes deciding what types of insurance you will need to continue to protect yourself, your loved ones, and your possessions.
Life insurance is incredibly important to help alleviate expenses during times in need – medical emergencies, long-term disability coverage, and the like. Your needs for certain types of insurance will change throughout your life.
That said, reassessing the types of insurance you will need, the amount of coverage you may require per year, and the monthly premiums you can afford are all important to weigh. Your age, health, and financial situation are equally important in this decision.
When do you plan on retiring? What are your retirement goals? Where do you plan to live after you retire? How much do you expect to have by the time you retire? A financial advisor can assist you with answering the latter questions to help you come up with an efficient plan.
When planning for retirement, the whole idea is to ensure you’ll have enough retirement funds to live the life you feel you deserve during your golden years. The last thing you’ll want to do is come out of retirement to fund a lifestyle you didn’t know you wouldn’t be able to afford in the first place.
Finally, a vital part of your financial plan is creating an estate plan. To one’s surprise, a whopping 60 percent of adult Americans alone are not prepared with an estate plan or a will, according to AARP.
However, estate planning is important. After you pass, you will want to ensure your assets get distributed as per your wishes. Doing so not only guarantees your loved ones will receive the assets you want to give to them, but it also makes the process of achieving such assets much easier – especially while during grieving.
Overall, making the decision to opt for financial planning is a mature step. There is no shame in taking the time to break down your financial expenses and goals to ensure you can always make your ends meet without help from friends, family, or loans for borrowing money. You’re better off managing your finances right the first time around.
About AEGON Life
A joint venture between AEGON – world’s leading financial services and Bennett, Coleman & Company – India’s leading media house, AEGON Life Insurance launched its pan-India operations in July 2008. Armed with a vision to be the most recommended new age life insurance Company, AEGON Life adopts the power of global expertise by leveraging digital platforms to bring transparent solutions, and to prioritize customer needs. Our financial planning and investment solutions include term life insurance plans, pension plans, unit-linked insurance plans (ULIPs), health insurance plans, child education plans, and more.
About Garret Smith
Garret Smith has a B.S. in finance with a minor in accounting. Smith has been working in the financial planning field for over a decade and relishes writing articles within the finance niche on the side.