Financial Planning to Meet Future Goals

Financial well-being March 1, 2023 By First United Bank

Meeting short- and long-term financial goals takes careful planning. Learning how to control your income, expenses, and investments is the best way to plan for your future, individually and as a business owner. Let’s take a deep dive into financial planning and how you can start to get ahead today.

What is a financial plan?

A financial plan is a complete picture of your current finances, financial goals, and any strategies you have set to achieve those goals. Financial plans help people and businesses live and operate within their means, eliminate debt, and save for the future. Your financial plan is the steps you plan to take to achieve your future financial goals.

Why is financial planning helpful?

Financial planning is essential because it improves and maintains long-term financial health. A good financial plan allows you to set measurable goals which guide you on how to use your money, making you more likely to feel in control and more confident about your decisions.

Simple steps to make a financial plan.

Begin by prioritizing your financial goals into short- and long-term goals, making them attainable and inspirational. What do you want your life or business to look like in five, ten, or twenty years? Do you wish to pay off your home loan or credit card debt? Or maybe you want to open a second business location or are looking to retire and travel the world? If you work to make your goals inspirational and attainable, planning how you will reach them will feel more intentional.

Next, take a deep dive into your finances by reviewing your monthly income, outstanding debts, bank account balances, and monthly fixed expenses and creating a budget. Your budget will focus on your spending habits and should include basics like mortgage payments, loans, groceries, tithing, and entertainment; not so basics like subscriptions, account fees, charity, and travel; as well as contributions to your short- and long-term goals such as debt elimination, retirement, and contributions to your emergency fund.

Tip: First United recommends the 50/30/20 budget principles: Put 50% of your take-home pay toward Needs and Obligations (housing, utilities, transportation, and other recurring payments), 30% toward Wants (dining out, clothing, entertainment), and 20% toward Savings.

Finally, create a plan to grow your wealth through saving and investing. By investing the money that you save, your money can generate more money through earning interest or dividends. Get started by setting savings goals – do you want money to start a new business or to retire early? Once you know your goal, you can determine how long you want to take to reach that goal, how much you need to save, and what type of investment to make.

How does my current budget fit with a financial plan?

Your budget and financial plan work hand-in-hand; think of your budget as a way to meet the long-term goals you have set in your financial plan. Partnering your budget and your financial plan will help you create a roadmap for your financial future, ensuring that you are spending your money wisely.

Protect and grow your financial well-being.

Each step moves you closer to financial well-being by providing you or your business protection from financial setbacks. Still, it is important to remember that your financial plan isn’t a static document — it is a tool to track your progress and should evolve as your life or business grows and changes.

Your financial journey is essential to your overall well-being. You don’t have to do it alone, don’t be afraid to ask for advice. Contact your lender today if you have additional questions.

By First United Bank