Creating a long-term financial plan is the key to growing your wealth. According to AG Morgan, it’s the foundation on which you’ll build success, but it can also be overwhelming if you don’t know where to start. You want your financial plan to be flexible and adaptable so that it works for both short-term goals and long-term objectives. In this post, we’ll walk through how to create a plan that fits with your life goals as well as how to get started on setting up one yourself!
What is a long-term financial plan?
A long-term financial plan is a roadmap to help you reach your goals. It’s a comprehensive plan that includes all aspects of your finances–from income to spending, savings and debt repayment–to help you understand what you have, where you are going, and how long it will take for the two points on the map to meet.
A good financial plan should be realistic and flexible enough for unexpected events (such as job loss or health problems) so that they don’t derail all of your hard work toward reaching those goals.
Why is it important?
It’s important to have a plan for the future because you can’t control the future, but you can control how you prepare for it. You need to know what you want to achieve before you can achieve it.
How do you set one up?
- Create a list of goals.
- Set a timeline.
- Create a budget: You’ll need to figure out what your monthly expenses are and then determine how much money you can put away for retirement each month, as well as how much should go into other savings accounts (like an emergency fund).
Establishing specific goals.
Establishing specific goals is the first step to creating a financial plan. Goals should be clearly defined and measurable in terms of time, money and/or other factors. For example, if your goal is to buy a house by 2020, you’ll need to save enough money for a down payment by then. If your goal is to pay off student loans before you turn 30 years old, then this will require paying extra toward student loan debt each month until it’s paid off at that time period.
Setting realistic timelines for accomplishing these goals will help ensure they are met on time–and if they aren’t met as planned or if something comes up unexpectedly during their pursuit (such as losing one’s job), there will still be plenty of time remaining before reaching said deadline so that adjustments can be made accordingly without putting anyone into financial distress.”
A long-term financial plan is a tool that can help you achieve your goals and meet your financial needs. By setting up a plan, you’ll be able to see where you are today and where you want to be in the future. With this information in hand, it will be easier for you to make decisions about how much money should go toward each goal or category of spending as well as what investments might be best suited for each area.