Planning out your financial future is sort of like being a parent over your own money. And as parents say, there is no manual for being the perfect mom or dad. There are just things that work and others that don’t. Here are some tips to consider when planning the financial future that may work for you!
1. Create a Financial Calendar
Understanding where your hard-earned money goes can be an eye-opener for some. Create a financial calendar and break it down into four quarters. Make sure you are looking over your income and expenses, your spending habits, credit score and more. When organizing all of these financial details, ask yourself if they line up with your financial goals. If they do, continue to the next quarter. If they don’t, try to see where you can improve. Who knows, maybe reducing your daily coffee runs might save you some significant dollars in the long run!
2. Invest in Things That Invest Back
If you had ten dollars to either invest in your business or invest in a t-shirt, what will have more return? If you selected business, you are right. Of course, treating yourself to a little retail therapy is ok, but make sure you invest in your business, career, and future. The return will be far greater than the shirt you bought that might be outdated a year from now. Invest in a course to further your career, or a new program that might help you advertise, or someone to help you plan out your business. The give back is far more important long term.
3. Know Your Income, Know Your Expenses
Knowing your income versus your expenses falls in line with your financial calendar. Understand how much you make on average and what your costs are. Your expenses include significant finances such as rent and loans to small expenses like subscriptions and small purchases. If your spending nearly as much as you make, that doesn’t leave much room for you to save. Create yourself a spreadsheet that adds your income, subtracts your expenses, and gives you a total for wiggle space.
4. Do the Right Thing.
Doing the right thing is something that sounds so simple, but sometimes can be challenging. Say you have to pay $150 for a filling for your tooth. That seems like a lot, and it’s something we don’t feel like spending our hard-earned money on. So, instead of getting that filling, you push that responsibility to the side and continue to spend on other “priorities.” Long term, this can add stress and that filling can turn into a root canal. Bite the bullet and take care of your responsibilities. Even breaking that $150 down into payments of three can help you keep on top of your financial goals and leave you with a clear conscience.
5. Invest, and Understand it Might Be Longterm
Some of our investments can pay off in a matter of 1 year. Others may take a bit longer. Quality investments may mean you have to hold onto them a bit more long term before seeing those numbers grow. Such as a home investment. If you were to purchase a home, flip it and then sell it. You may see an increase in value. But, if that is not in your itinerary, it may be wise to hold onto that home for more than a year. You may see a small growth in profit over 12 months, but you will see a more significant jump if it’s longer. Understand that patience is a virtue. Take a deep breath, two steps back, and wait for your investments to benefit you.
Plan long term as opposed to short term, invest in your future, acknowledge your spending habits, and of course, create annual goals. Together with many others, these helpful tips can build a bright and promising path to long-term positive financial outcomes. If you need help, find yourself a financial planner. Some people tackle these money concepts daily and project expert opinions to guide you in the right direction. Contact Osoyoos Credit Union to book your appointment and connect with a financial planner today.