Some questions a financial plan will help you answer
For many of us, our finances regularly keep us up at night – can I have a budget and still enjoy my life? Do I pay off my debt first or build up my savings? Do I have enough put away for retirement? Here are some questions a financial plan can help you answer:
- How do I create a budget that fits my lifestyle? Creating a budget is at the heart of any financial plan, and learning to manage it is key to thriving financially. Follow the 50-30-20 rule:
- 50% of your after-tax income covers your needs
- 30% covers your wants
- 20% is what you save
- Should I pay off my debt or build up my savings? There are advantages to getting your savings started as soon as possible, mostly the opportunity to grow your nest egg over time. But, not all debt is the same. Particularly with credit card debt, it’s advisable you pay that off as soon as you can as the interest rates can be extremely high.
- How do I know if I’m saving enough for retirement? Make sure to pay yourself first rather than save whatever is left over after your bills and expenses. It’s never too early to start planning your retirement and it’s never too late to plan what it’s going to look like.