Having a prioritized financial plan can help you achieve your goals and meet your needs says AG Morgan Financial Advisors. To create one, follow these steps:
Have a Plan
Before you can prioritize your financial plans, you need to have a plan.
And by “plan,” I mean a strategic roadmap for where you want to go and how you’ll get there. Your financial plan is all about setting goals and priorities, then planning out the steps needed to achieve those things. The process of planning your financial future is ongoing—it’s not something that happens once in your life, but rather it should be revisited regularly as new goals and priorities arise. So even if all of this sounds overwhelming at first, don’t worry! We’ve got some tips to help make it easier on everyone involved:
Consider Your Timeframe
The time horizon of your financial plan is the length of time you have to save for your goals. For example, if you want to be financially independent in five years, then your short-term goal would be achieving that milestone within that timeframe.
In general, the longer your time horizon (i.e., the further out from now you have a goal), the less money it will take to achieve it. This is because compound interest works its magic over a long period of time; for example: if you invest $100 today and earn 10% interest each year for 30 years (assuming no taxes or fees), at the end of those 30 years, that $100 investment will grow into more than $1 million!
Go with Your Gut
You’ll have to make decisions about your financial future all the time, but you can always go with your gut. If you trust yourself and go with your instincts, it will be much easier for you to prioritize what’s important in life.
Don’t Forget Taxes and Fees
Taxes and fees can eat into your returns, so it’s important to consider how much you will pay in taxes when you invest. You also need to make sure that you’re not paying too much in fees. For example, if an investment has a high expense ratio (or cost of upkeep), then there’s a good chance that it is not the best place for your money.
Fees can be a big drag on your returns—and they’re often hidden costs! But once you know what kinds of fees are out there, it’s easy enough to avoid them by steering clear of mutual funds with too many layers or actively-managed ETFs with high expense ratios.
Creating a prioritized financial plan is the first step to achieving your goals.
Creating a prioritized financial plan is the first step to achieving your goals.
You should be able to prioritize your financial plans based on your risk tolerance, time frame and goals. If you are not sure which financial plans to prioritize, start with your emergency fund. This is an important long-term goal that can help protect against emergencies. You may also want to consider saving for retirement or paying off debt such as student loans or credit cards because these are short-term goals that have immediate benefits like lower interest rates and improved credit ratings.
Conclusion
As you can see, prioritizing your financial plans is a lot easier than you thought. It’s all about having a clear goal in mind and keeping in mind what your priorities are. By following these steps, you’ll be able to create a prioritized financial plan that will help you achieve your goals.
