Securing your future financially is a form of financial planning. This concept can seem daunting for the majority of us, but there are some failsafe ways to ensure your finances to the best of your ability. These ‘Golden Rules’ are a generic starting point that can be adapted to better suit you and your needs respectively.
This is the first step in controlling your finances and assuring a positive financial future. Money management is a broad but an important focal point to rearranging your finances. If you give it the focus it deserves then this will become a starting point for all your financial decisions in the future.
You should set out your financial goals out for the month and aim to keep a percentage of your income aside for savings.
Personal Balance Sheet
The sole outcome of a balance sheet is to see what you own and what you owe. Businesses use this to see where their shortfalls are in certain parts of their business and rectify them. You could use this the same principle to sort out your own finances. It is also a great way to map out your incomings and outgoings, spotting trends to see where more money could be saved.
Portfolio for Personal Investment
This is a great way to help you accumulate wealth in the future. Personal investment portfolios can be filled with whatever the person wishes; it could be art, finance, crypto or other types of investments.
Anything that could be potentially lucrative and within your financial remit to invest in now, it is important to search for investments that will gradually increase overtime.
It doesn’t matter what your age is, you have to plan for your retirement and the sooner the better. The general things your must consider should be what age do you want to retire, how much money you need to meet your expenses every month and what you think that will be in the future.
You should ensure all of your debts are managed prior to retirement and that your personal investments are cashed in ready if they are needed.
To help you make these assumptions there are some great online tools and retirement calculators. These should be used as a basis for your retirement plans, including any other potential earnings or investments that may come in along the way.
When taking out any kind of insurances or investing in new things it is important to consider the potential risks associated with this. It could be that you are using a lot of your outgoings to initially cover these investments, meaning you will have less money to spend right now.
It could be that some of your investments are risky with the potential to lose money if not correctly mapped out and watched. This will require more time and effort to ensure a good return. These kinds of risks will require a financial advisor to allow you to not make silly mistakes and lose money.
Regardless of your age your main focus should be re-paying your debts to ensure that you do not have money outstanding against your name. These can take up a lot of your income on a monthly basis and could get you in a tricky situation.
You should create a strategy for the outstanding debts that you have, the general consensus is to pay off the most expensive debt first, leaving you with more money to service the rest of the debts.
Shockingly, we all have an estate. This could be your home, car, money or debts. The best way to ensure your financial security would be to ensure that you have a map of your whole estate. This will allow you to create a will, plan or an itemised record of all the things you own.
In the future this can be used to ensure that your loved ones receive everything you own when you are not around. Although it seems morbid, it is a great time to give away your estate to avoid any potential fees or hidden charges associated with wills.
It is quite a difficult concept to try and secure your financial future now. Nevertheless, this practise will allow you to be more confident in your savings, investments and later life plans.
For most people financial issues can be really damaging to there everyday life, these above golden rules can help you sort these issues out now and ensure a healthy bank account for the future.
It is about being open minded, honest and willing to take the time and effort out to make these ideals work and become a part of your everyday life. Once you have adopted them into your life they will become second nature.