Building your personal finances is sort of like building a house; without a strong foundation in place either is likely to crumbled when a storm comes along. Once a solid financial foundation is set, what are some other things that you can work on to further build out your financial house? No one wants a plain, bare house, right?
Once you have an adequate emergency fund in place, the proper insurance coverages in place, and are saving adequately for retirement, it’s time to start thinking about some of the more technical questions that you may have and begin adding some of the details to your financial structure. Sure, you could live in a box-shaped house with the basics that provides shelter and keeps you safe, but most people want more than that. Hopefully you want more for your financial life as well.
Next Steps
Painting, adding rooms and amenities, and putting the finishing touches on your financial plan can be difficult to think through. Often, people aren’t even sure what questions to ask. Should I pay down debt more quickly or should I save more? Which debt should I pay down first? Is it better to pay down my student loans faster or my mortgage?
Additionally, this means that you need to start thinking about your long-term goals. Now that you have a solid financial foundation in place, ask yourself why you went through the trouble of doing so and what you want your money to accomplish for you.
Are you looking for security? Do you want to help others? Buy a new house? A new car? Travel? Pay for your child’s college education? Defining and prioritizing your goals will help you figure out what the next steps are that you need to take.
What are the things that you’re not even considering that you should be? There are a lot of the more technical aspects of financial planning that most people don’t even know about so they never have a chance to work on them. This is when having a financial planner on your side can be valuable.
Continuous Process
Maintaining a home is an ongoing process that doesn’t stop once the contract is signed and the home is yours; this is just the beginning. A home requires a lot of maintenance, repairs, and tidying up to keep it in good condition and make sure that all parts are working together properly. The same goes for your personal financial life.
If you’ve taken the time to get everything in order, then don’t wait so long to revisit it. Our lives constantly change which almost always directly affects our personal finances, whether we know it or not. Financial planning should be seen as an ongoing process that is revisited often to make sure that your financial life is working together the way that it should and so that it will help you to reach the goals that you’ve set for your money.
