Let’s start this article off with a bit of Truth. When it comes to your life and your finances, having financial planning strategies is something you don’t want to mess up! The unfortunate truth about life is that you only have one chance at it, especially when it comes to your finances.
The unfortunate reality is quite bleak. The majority of Americans struggle with wealth Building. Because of this, most reach retirement age with very little saved up. That’s no way to live your golden years!
The truth is, to build a strong and solid foundation, we all need to figure out our own financial planning strategies early on. The Game of wealth is a marathon not a Sprint. It takes years to build wealth so it’s important to start as early as possible.
In this article we will go over the top five wealth building financial planning strategies that everyone can and should implement in their financial life.
Strategy 1: Have a budget
Before you scroll to the next strategy, take a second to actually read this paragraph. I am sure that this is not news to you. I bet you have come across hundreds of articles telling you that you need to have a budget.
You are probably thinking “oh, I know this one. Tell me something that I don’t know.” Many people reading this article will most likely have that thought, but do you actually have a budget?
If not, it’s absolutely time that you start one! I know, it’s not fun and exciting like if I told you to go invest in stocks or something. However, something as basic as having a budget can be the difference between retiring in millionaire or broke. This is one of the strongest pillars when it comes to your financial planning strategies.
I know, this all Probably sounds a bit exaggerated but it’s unfortunately the sad truth. The reason why so many struggle with credit card debt is that people are basically spending money they don’t have. Having a budget controls that spending because you know exactly how much you can spend any given month.
Strategy 2: Have an emergency fund
This neatly brings us to our second strategy. Having an emergency fund is absolutely critical when it comes to Building Wealth in your lifetime.
Did you know that over 40% of Americans do not have $400 to cover an emergency expense? That’s a staggering amount! That is almost one in every two people in the entire country.
When the emergency situations arise, it’s better to be prepared than to start scrounging around for change or for a credit card. You have no control over your car breaking down, an emergency hospital bill, unexpectedly losing your job, etc.
An emergency will come, sooner or later. That’s just a fact of life, so make sure you’ve got an emergency fund!Tweet
To make sure that you have ample protection over any unexpected emergency, make sure you save three to six months worth of expenses. Building an emergency fund takes time, so you better start now. It’s better late than never!
Strategy 3: Pay off your debts
The number one killer of wealth is debt. From now on, I want you to see that as an absolute threats to your existence, your future, and your life! Definitely remember this as one of the most important financial planning strategies from this list.
There are very few instances in life where it can be justified. Honestly, the only 30 should ever have is a mortgage. Anything else needs to be paid off as soon as possible!
If you really want to get ahead in life, you need to stop telling yourself that debt is good. The problem with debt is that all you see is a monthly payment. I mean, what’s $100 here $400 there per month? Doesn’t seem like much, until you actually do the math.
When you take into account the interest rate and the years it takes for you to pay off that brand new TV or cell phone, you could have been investing that money instead. I know, I sounds so cliché right now, but debt needs to be eradicated from your life.
If you have a car payment, phone payment, or even payments on your clothes right now, imagine the relief and freedom you would have if you didn’t have those payments. What would you do with that extra five to six hundred dollars a month? A lot I’m sure!
Strategy 4: Know your credit score
Did you know that it is very expensive to be financially irresponsible? When you recklessly rack up credit card debt and Miss payments here and there, it’s completely ruins your credit score.
Knowing your credit score is a fantastic Financial strategy that very few people take advantage of. A credit score is like a report card from school. It tells you where you are doing good, and where you are failing at.
How can you expect to improve something if you don’t know something is wrong with it? That’s where knowing your credit score comes in.
When you have a high credit score, you get to enjoy the lowest interest rates and keep more money in your pocket. I will always tell you never to get a credit card or get a car payment, but if you already have those, boosting your credit score can make it that much more affordable and easier to pay them off faster.
To make sure you know and keep track of your credit score. This will help you in the long run, trust me.
Strategy 5: Have a written plan
I have saved the best for last! Let me start this one off of the quote, and I encourage you to share it with your friends and family 🙂
What get’s measured gets improved!Tweet
With anything in life, if you want to improve it you have to keep track of it. It’s like trying to reach a destination without a map. How do you know you’re going round in circles? If you are not keeping track of it, you will never know.
That same rule applies with your financial goals. You have to keep track of them, measure them, and work towards improving them. Always have a written plan for your finances and revisit it often.
The majority of people out there just live life without any sort of Target. You must have a clear objective of what you want. You must also have a clear time frame of achieving these objectives and very clear and specific steps to achieve them.
There is power in keeping track of your goals and actually writing them down. If you really want to achieve success in your life and finances, it is absolutely Paramount that to you write your goals down.
Don’t just coast through your life, have a plan, a written plan!
As my father always told me, “Life is very Individual.” there is no such thing as a perfect financial planning strategy that works for every single person. That’s because every person’s life it’s different.
Investing and reaching your financial goals is both an art and a science. There’s an element of creativity and there is also an element of calculated risks.
Always remember that, like any other strategy in life, which must be flexible and evolving with time. But, at the end of the day, it should closely resemble the top five I’ve listed above.
If I can do it, you can too! 🙂 Happy strategizing!