Start Saving Today with a Long-Term Financial Plan

Whether you’re in your twenties or approaching retirement, it’s never a bad time to start saving for your future. Developing a long-term financial plan will help you achieve your monetary goals for the future. Use these tips to help you get started:

1) Think about your goals.

Depending on your life stage, your long-term financial goals will vary. If you’re in your twenties or thirties, you may be thinking about buying your first home, getting married, or starting a family. If you’re already a parent, you might be worried about the costs of your children’s education. Those who are approaching retirement age may be worried about maintaining their standard of living in their twilight years. Prioritize your goals and come up with a rough estimate of how much you’ll need to save to meet them.

2) Calculate your income, expenses, and debt.

Of course, you’ll need to get a clear picture of your current financial condition before you move forward. Make a list of your sources of monthly income and your expenses, including utilities, groceries, transportation costs, entertainment, and any loans you are currently paying back. If you have some extra wiggle room in your budget already, designate it for your savings fund. If you need to cut costs, use a budget worksheet to help you scale back. If you’re in debt, try to consolidate your loans into one payment or pay off debts with the highest interest rate first.

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3) Start saving and/or investing.

No matter what your long-terms goals are, the first step in your planning should be to create an emergency fund to protect yourself from an unexpected financial downturn. Open up a savings account and start setting aside enough money to cover your living expenses for at least six months. If you’re worried about spending the money, have your bank remove access to your savings account from your card.

Explore savings and investment opportunities outside of traditional savings accounts. If you’re looking for a high-return investment over a year or two, try a high interest savings account, a GIC, or a term deposit. Bonds, Tax Free Savings Accounts (TFSAs), and Register Retirement Savings Plans (RRSPs) are fairly conservative investment plans that will help you save money as well. In many cases, you can have your employer automatically deduct a certain amount of your paycheck into a RRSP so you won’t have to worry about saving the money yourself. Younger people can take more financial risks by investing in stocks or high-risk/high-reward opportunities.

4) Review your plan regularly.

Take some time every quarter to review where you stand with your long-term plan. Do you need to adjust your goals? Find ways to cut costs? If you find you are having trouble managing money on your own, consider enlisting the help of a professional.

Author Bio

Michael Edmondstone is a writer who contributes to websites and blogs. If you’re thinking of refinancing or buying a new home, check mortgage rates in Canada to find the best deals.

Michael Edmondstone is a freelance personal finance writer.

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