Proactive Financial Planning
A study by the Federal Reserve found that only 57% of adults have enough savings to cover a $500 emergency expense. This lack of preparedness can lead to all sorts of financial problems down the road, including an inability to retire or pay for unexpected medical expenses. Additionally, less than half of Americans have a retirement plan. Just 49% of workers have access to a plan through their job, and even fewer actually participate in one. This lack of proactive financial planning can have serious consequences down the road (you can learn more about this information for the Federal Reserve here).
It’s impossible to predict the future, but that doesn’t mean you can’t be proactive about your finances. In fact, there are many important reasons why being proactive about money matters is a smart idea. In this blog post, we will talk about five of those reasons, provide some tips on how proactive financial planning, and give examples of things you can do to start being proactive today in preparing for your future.
Preparing for the Unexpected
One important reason to be proactive about financial planning is that you never know when an unexpected life event will occur. Whether it’s a job loss, an accident, or an illness, these events can seriously impact your finances if you’re not prepared. Having a solid financial plan in place can help you weather these types of storms and start to get back on track sooner.
Other possible events that could have a serious impact on your finances that you may not have thought of are:
– A significant home repair or renovation
– An unexpected medical expense
– Having a baby, adopting, or fostering children
– Taking care of another family member
Reaching Your Long-Term Goals and Dreams
Another reason to be proactive about financial planning is that it can help you reach your long-term goals and dreams. A well-crafted financial plan will consider your current situation, goals, and how best to get you there. It can also help you make the most of opportunities that come your way, such as a raise or bonus at work.
Being proactive about financial planning help you reach your long-term goals by:
– Saving money each month to reach your goal faster
– Investing money wisely so that it grows over time
– Staying on track and avoiding making costly mistakes
Reducing Your Stress
Proper financial planning can also help reduce stress and anxiety over money. Money is one of the leading causes of stress for many people, but it doesn’t have to be that way. So by being proactive about your finances and taking steps to plan for your future, you can enjoy greater peace of mind.
There are a few things that can be stressful about managing your finances:
– Worrying about having enough money to cover unexpected expenses
– Not knowing if you’re on track to reach your long-term financial goals
– Feeling like you’re never going to get ahead financially
Constantly worrying about money can actually lead to physical and mental health problems. Fortunately, you can do things to reduce this stress; proper financial planning is one of the best ways to reduce stress and anxiety about money matters.
It's Never too Late to Start Planning
It’s never too late to start planning for your future, no matter how old you are. If you’re in your 20s or 30s, now is the time to start thinking about things like retirement and college savings. And if you’re in your 40s or 50s, it’s not too late to get started, either. The sooner you begin planning, the more prepared you’ll be for whatever life throws your way.
Getting back on track with your financial planning is possible even if you’ve started late. If you are planning and want to start saving for retirement, the key is to start as soon as possible and make catch-up contributions where allowed.
Catch-up contributions are additional contributions that people 50 years or older can make to their retirement accounts. For example, as of 2019, people 50 years or older can contribute an extra $6000 to their 401(k) accounts.
If you’re behind on your retirement savings, talk to a financial planner at Iron Point Financial about how you can make catch-up contributions and get back on track.
What You Can Do to Be Proactive
There are several things you can do to start being proactive about financial planning:
-Review your current situation and develop a budget; this will help you get a better understanding of where your money is going and what changes you need to make to reach your goals
-Start saving for retirement; even if you’re still years away from retirement, it’s never too early to start saving
– Automating your finances so that you don’t have to think about it each month
– Reviewing your budget regularly to make sure you are on track
– Making a plan for how to deal with debt
– Investing in yourself by taking courses and learning about financial planning
– Talking to a financial planner to get professional advice
If you’re unsure where to start or what steps to take next in your proactive financial planning, reach out today to a financial planner at Iron Point Financial. We can help you develop a proactive financial plan tailored to your unique situation and goals. Contact us today to learn more about how we can help you!
We serve the Grove City, Greenville, Erie, Cranberry Township, and Boardman, OH areas.
