Working Towards Financial Freedom
When we think of financial freedom, we often think of retirement. Will we have enough to be comfortable? To be healthy? These are important questions, and preparing for retirement is certainly vital. However, what if you could be financially free every day? In other words, what if your money worked for you? What if you could reduce financial stress? What if your money was not a source of tension but a tool that enabled you to live your life as you see fit?
A sound financial plan can (and should) encompass both long-term goals, such as retirement and shorter-term goals that relate directly to day-to-day life. Given that 78% of the workforce is living paycheck to paycheck and struggling with debt, achieving a level of financial security now can seem impossible. This, in turn, makes it more difficult to save for the big goals (house, children, college, retirement).
You may be thinking that financial planning is only for “wealthy” people. This is not true: a financial plan is a statement that captures your long-term goals and a detailed plan to save and invest in order to reach those goals. A financial planner looks at your current financial state and what you want or need it to look like in the future. Everyone can benefit from a plan - no matter where they are starting.
A professional financial planner helps you look at your finances, organize them, and project the impact of savings and investments. They can also assist you in making decisions so you can reach your goals as efficiently as possible. The question isn’t can you afford a financial planner; it’s can you afford not to get help from a financial planner!
Steps You Can Take Now
This year, take the following steps to start shoring up your financial situation:
- Build an Emergency Fund. You never know when you will have a medical crisis, an expensive home or vehicle repair, or another emergency that can rock the financial boat. Establish a fund that you can draw on when these events occur.
You have probably heard it should be the equivalent of 6-12 months of expenses. This may not be feasible for you at this point. In this case, start with small amounts and goals. For example, how much would I need if I had to take an emergency flight to see a sick relative? Or how much would I need if I need new tires for my car? Stop obsessing (and fearing) the 6-12 months adage; just start putting money away, and keep adding to it. Your financial planner can help you identify ways to help you do this.
- Budget. No one likes the sound of this! But take a little time to record your income (from all sources) and your expenditures. Essentially, what do you have coming in and what is going right back out? Remember to add a line item for fun. If you love to go out to restaurants each week or take your family on vacation each year, include that in your budget so you can account for those expenses.
- Keep Your Goals in Mind. This applies to both long- and short-term goals. For example, if you have been wanting to go to Paris your whole life, start saving in your “Fun Fund.” Are you willing to make any sacrifices to get there faster (e.g. cutting cable, taking lunch to work, finding a roommate or renter, etc.)? Saving towards a goal often gives us the motivation to avoid the temptation that delivers only very temporary satisfaction (e.g. another new pair of shoes).
- Call Faw & Associates. Contact us today to learn more about our financial planning services and how they can help you achieve your goals.
The gift of financial security and freedom is… well, priceless. To get there, get in touch with the Faw & Associates team today.