<p>The answer to&nbsp;how to take control of your finances&nbsp;can mean different things to different people. For someone in debt, this could mean repaying loans and mortgages and eliminating all forms of debt, including credit cards. It could mean creating a budget and ensuring optimal savings at a steady rate for someone struggling to make ends meet. Likewise, for someone not having enough financial foresight, it could entail investing money in the market to create a source of income for the future.</p>
<p>Taking control of your money is also not only about fixing errors or lapses in judgment. Even if you do not suffer from any of the common financial problems, you can still benefit from taking charge of your finances and ensuring consistency and discipline in financial planning. There are a number of things that can go against you. Right from inflation and recession to losing a job or a loved one, financial blows can come in more ways than one. They can also come at different junctures of life. Therefore, being prepared and in charge of your money can be one of the first steps to take in your journey to secure financial security. <a href="https://www.financialplanners.net/match-advisors/search-by-zip?cta=find-planner-home-page" target="_blank"><strong>Consult with a professional financial advisor</strong></a> who can help you create a customized financial plan based on your financial needs and goals.</p>
<p>If you are wondering&nbsp;how you can get on top of your finances, these 12 strategies can help:</p>
<h2>How do I get my finances under control?<strong><br /></strong></h2>
<p><strong>You can employ the following strategies to get your finances under control:</strong></p>
<h3>1. Create a budget:</h3>
<p>The first step in most <a href="https://www.financialplanners.net/articles/8-financial-planning-steps-to-take-to-help-ensure-financial-wellbeing" target="_blank">financial planning</a> guides is often creating a budget. A budget is the foundation of your financial future. If you have a realistic and efficient budget, you are far more likely to achieve financial success and a life of comfort and sufficiency. Creating a budget can start as early as childhood. Children who come up with a budget to use their pocket money or income from part-time jobs are far more likely to excel later in life. However, it is never too late to start.</p>
<p>There are many ways to create a budget, the most popular one being the 50 &ndash; 30 &ndash; 20 rule. According to this rule, you can allocate 50% of your after-tax income for your essential needs, like rent, gas, food, clothing, education, etc. 30% can be used to fulfill your wants, such as eating out, traveling, buying electronics, etc. These expenses are not essential for your survival but add value to your life in other ways. Finally, the remaining 20% can be used to save and invest for the future. The percentages can remain the same. However, the values can increase as your income grows with age. This way, you will always have enough savings and investments for your needs.</p>
<h3>2. Eliminate debt:</h3>
<p>High-interest debt can be expensive to have. It also prohibits your future growth. If you wish to&nbsp;improve your finances, you must prioritize paying off your debts and limiting dependence on them for the future. Not all debt is bad. Moreover, not all debt is avoidable. You may have had to take a student loan to put yourself through college. Given the towering real estate rates, a home loan may also be necessary. However, handling them sensibly is essential. Clearing your student debt must be one of the first things you do when you start earning. Student loan interest rates are amongst the highest in the market, so save more in the initial years and settle your dues at the earliest. Avoid using a credit card, as its interest can be an added expense to burden you during this time. In the case of a home loan, save as much as you can for the down payment. This will reduce your loan needs. Moreover, instead of buying a huge house, stick to your basic requirements and pick a home that is easy to maintain and accommodates your needs.</p>
<h3>3. Set specific financial goals:</h3>
<p>Setting financial goals can help you&nbsp;improve your finances. When you set goals, you clearly see what you want in life. This, in turn, enables you to develop a suitable strategy for it. For instance, if you want to save money for a child&rsquo;s education, you can start by getting an estimate of the total money you need and the time available to reach your target. You can then set aside an investment budget according to your income and other expenses. Next, pick an instrument that offers a reasonable rate of return. <br /><br />Direct goals are far more achievable than vague goals. So, be as clear as possible. This will make it easier to track your progress and identify any loopholes along the way.</p>
<h3>4. Read and update your financial knowledge:</h3>
<p>This is particularly helpful if you lack the required know-how of the savings and investment process. The market is full of instruments that can help you save and invest to meet your goals. However, the absence of sufficient information or interest can come in the way of your growth. Try to read as much as possible about the various options you have. Understand their differences, taxability, growth potential, performance, past returns, and more to make up your mind about the right pick. You can opt for online newsletters from financial advising firms, newspapers, magazines, and more. You can also simply read the newspaper&rsquo;s financial section to stay up to date. Every company also has a finance division. You can contact the one in your organization to clear any doubts about your company-sponsored stock options or 401ks.&nbsp;</p>
<h3>5. Invest more:</h3>
<p>Investing helps your money grow and beat inflation. It also allows you to cater to multiple financial goals that can require a high lump sum. For instance, buying a car can be expensive, and you may not always have enough money. However, if you invest your money, over time, you will be able to create a corpus that can suffice to pay for a car. Investing is essential to cover your emerging needs. It is also vital to build financial security for the future, for example, in retirement, when you would no longer have a salary to depend on. In that case, you can use your investment returns to cover your basic needs, such as healthcare, food, travel, and more. Investing helps secure your future and lets you be financially independent, so you do not have to rely on others for your needs.</p>
<h3>6. Get insurance:</h3>
<p>Insurance is a must-have to deal with unexpected situations in life. Insurance offers financial protection in a crisis and secures you and your family against liabilities. There are many types of insurance plans that can help you&nbsp;take control of your finances&nbsp;in an emergency. Health insurance can offer financial security against health-related expenses, like illnesses, accidents, annual health check-ups, prescription drugs, doctor&rsquo;s consultations, dieticians, and more. Health insurance protects your savings and ensures that you do not lose all your money during a medical emergency. The next insurance product that can help you is life insurance. Life insurance enables you to leave a legacy behind for your loved ones. Life insurance provides tax-free money to your nominee in the case of your untimely demise. This money can be used to repay your debts, cover your family&rsquo;s basic needs, and a lot more. In addition to this, you can also protect your assets and savings by buying renter&rsquo;s insurance, car insurance, jewelry insurance, and more.</p>
<h3>7. Minimize non-essential expenses:</h3>
<p>If you want<strong>&nbsp;</strong>to&nbsp;improve your finances, you would have to limit your non-essential expenses. These can include anything that you do not necessarily need or does not add value to your life in the long run. Most impulse purchases fall into this category, such as branded clothes or shoes, expensive foods or beverages, and high-priced hotels or experiences. These expenses can be spur-of-the-moment decisions but cause considerable damage to your long-term financial security. One helpful strategy to reduce them can be to think over your choices. If you feel like buying an expensive bag or booking a high-priced hotel for your vacation, curb the urge to make the purchase immediately. Wait for a few days and see if you still want the same thing. In most cases, the urge passes away, and you are able to see and think clearly. Additionally, always look for affordable alternatives and discounts. If you must book a luxury hotel, see if there are other places that offer the same facilities but at a lower cost. Certain websites may also offer discounts on the same hotel and help you lower your expenses.</p>
<h3>8. Look for additional income sources:</h3>
<p>If you are struggling to cover all your financial needs with one income, try to create another source. You can take up a part-time job if you have the time. There are a lot of different opportunities on the internet that allow you to leverage your skills. Additionally, you can also consider starting a business. For instance, you can sell things online, create a service-based business, etc. Rental income is also a great source of passive income. However, it requires a high investment amount. If you have the budget to invest in it, you can consider buying commercial or residential real estate and put it up for rent.</p>
<h3>9. Improve your job skills:</h3>
<p>Another effective way to&nbsp;take control of your finances&nbsp;is by increasing your income. The more money you have, the more comfortable your life will be. However, the competition is increasing manifold. Moreover, the older you get, the more you are likely to feel left out in the crowd. Companies can always hire younger people for the same skill sets at a lower price. So, the only way to keep growing is by ensuring that your knowledge and skills are continuously updated. You can take online courses, and talk to industry experts on LinkedIn or within your company to learn or enroll at a university. Every few years, you may have to up-skill yourself. So, be open to the possibility. This can help you with promotions, salary negotiations, and earning bonuses.</p>
<h3>10. Use money management apps:</h3>
<p>A simple way to&nbsp;take control of your finances&nbsp;can be by downloading relevant money management apps. There are several apps available in the market that can be helpful. You can use your bank&rsquo;s app to automate savings and investments, broker apps to keep track of your stocks or mutual funds, budgeting apps to monitor your expenses, and more. Most apps are free to use or may charge a nominal fee. Mobile apps can be very beneficial if you struggle to keep an eye on your money.</p>
<h3>11. Stay prepared for any eventuality with an emergency fund:</h3>
<p>A financial emergency can uproot your life and destroy your savings. Therefore, having an emergency fund is essential. Emergency funds refer to money you keep aside only for emergencies and not your regular use. For instance, you can turn to your emergency fund for your basic needs if you lose your job. Likewise, if there has been flooding damage to your house, an emergency fund can help you with repairs. Emergency funds should be highly liquid and easily accessible so you do not end up wasting time in a crisis. Moreover, it is advised to keep at least six to eight times your monthly salary in an emergency fund at all times. And if you use this money, make sure to replenish it as soon as you can.</p>
<h3>12. Hire a financial advisor:&nbsp;</h3>
<p>A financial advisor can be instrumental in improving your financial health. If you are busy with your professional and personal commitments, find it hard to follow market news, or are generally confused about&nbsp;how to get on top of your finances, you can benefit from hiring a professional financial advisor. Financial advisors can help with a number of things, right from budgeting and savings to tax planning, estate planning, investment planning, and more. They can recommend suitable investment instruments based on your age, risk appetite, and goals, such as stocks, bonds, exchange-traded funds, mutual funds, 401ks, individual retirement accounts, health savings accounts, 529 savings accounts, and more. They can streamline a lot of things and bring in more clarity to sort out your finances.</p>
<h2>To conclude</h2>
<p>Knowing&nbsp;how to take control of your finances&nbsp;is not all that hard as long as you plan well, are disciplined and focused, and do not overspend. Make sure to understand your financial limits and not go beyond your means. Moreover, try to save and invest more often. Make it a priority first to save your money and then spend the remaining, and not the other way around. Moreover, try to be rational with money and keep emotions and biases aside.</p>
<p>And if you need more help, you can always consider hiring a&nbsp;financial advisor&nbsp;who can offer you a professional perspective and help eliminate errors you may make in financial planning. Use the <a href="https://www.financialplanners.net/match-advisors/search-by-zip?cta=find-planner-home-page" target="_blank"><strong>free advisor match service</strong></a>&nbsp;to match with 1-3 advisors suited to meet your financial needs and goals.</p>

For financial stability and security, it is crucial to understand how to take control of your finances. Here are the top strategies to get your finances under control.

How to Improve and Take Control of Your Finances - Financialplanners.net

12 Strategies To Take Control of Your Finances

<p>There are different kinds of fees charged by advisors. An advisor can make money by either charging a percentage on the total value of your portfolio, on a per-hour basis, or a flat fee. Few advisors also earn an income through commissions by selling financial products and services.</p>
<p>In today&rsquo;s time, financial advisors also want a sustainable model to meet their financial needs. Therefore, several advisors have now structured their fees by combining different elements of fee and commissions.&nbsp; Do your due diligence before <a href="https://www.financialplanners.net/match-advisors/search-by-zip?cta=find-planner-home-page" target="_blank"><strong>hiring a professional financial advisor</strong></a> especially when it comes to the fee model used by them to charge a fee. You can also inquire the advisor about the fee structure used by them at the time of interviewing different prospects.</p>
<p>Herein, we will discuss the different kinds of fee structures used by financial advisors to charge a fee. Read on to know more.</p>
<h2>What is the typical cost of hiring a financial advisor?</h2>
<p>The cost of hiring a financial advisor differs from case to case. It will depend on your financial situation, assets, goals, and also the type of fee structure that your advisor has. For instance, If you are a high-net-worth individual (HNWI), your annual fixed fee retainer may be higher than $1,000. On the other hand, if an individual hires an advisor who charges a commission, the commission rates can be around 1% or slightly more. Moreover, if the advisor uses the Assets Under Management (AUM) fee model, he may charge at least 1% of AUM for advising services.</p>
<p>You must conduct a financial advisor fees comparison before finalizing an advisor. If you plan to get in touch with an advisor, try getting quotes from different companies and individuals to help determine the fee range an advisor can charge.</p>
<p>Once you have all the information, you can conduct a financial advisor fees comparison and make a decision.</p>
<h2>Is it worth hiring a financial advisor?</h2>
<p>Having clarity about your <a href="https://www.financialplanners.net/articles/achieving-your-financial-goals-with-the-help-of-a-financial-advisor" target="_blank">financial goals</a> would be ideal before you meet an advisor. You may contact an advisor if you have crossed a financial milestone or have undergone a lifestyle change because of marriage, job, childbirth, divorce, etc. These events have a considerable impact on your finances, and you may require an advisor's help to navigate these situations. You can also contact an advisor if you are new to the world of finance and have just started earning or investing. The advisor can help you manage your money and plan for your short-term and long-term financial goals and objectives.</p>
<p>In the end, hiring a financial advisor is a personal choice. Hence, it would be best if you tried chalking out your objectives before you get in touch with the advisor. In addition, if you feel stuck or are unclear about your goals, it may be wise to see an advisor to get clarity on the same.</p>
<h2>Different types of fees structures used by financial advisors</h2>
<h3>1. Flat fee</h3>
<p>Advisors that use a flat fee model to provide limited or comprehensive financial advice to their clients. They charge a flat fee based on the services required by the clients. The engagement may be carried out for a one-time service or may continue on an ongoing basis. For example, an advisor may charge a fee of $1,500 to $3,000 for designing an exhaustive <a href="https://www.financialplanners.net/articles/key-components-of-a-good-financial-plan" target="_blank">financial plan</a> as per the client&rsquo;s financial needs and goals. The advisor&rsquo;s costs can vary based on their expertise and years of experience.</p>
<h3>2. Hourly fee</h3>
<p>Several advisors charge hourly rates for their services. In most cases, they will have hourly rate payment plans for clients. These advisors are ideal for investors who have a small investment portfolio or are looking for some general investment and finance tips. The hourly charges typically fall in the range from $250 to $500 per hour, and the basic package may include a three-hour consultation.</p>
<h3>3. Tiered management fee</h3>
<p>Herein, asset management charges are fixed which means every client pays the same rate if the value of their assets is at a certain level. For example, the financial advisor may charge a rate of 1.75% for the first $250,000, 1.50% for the next $750,000, 1.25% on the next $4 million and so on.</p>
<p>Generally, the payments to the advisor are made on a quarterly basis. Thus, a change in the asset's market value will tend to affect the advisor's absolute fee.</p>
<h3>4. Commission&ndash;based fee</h3>
<p>Some advisors sell third-party products, which can include insurance, mutual funds, and more. These advisors earn a percentage of commission on every financial product they sell to their clients. Generally, investors are advised against hiring such advisors as they are not fiduciaries and may not keep your best interest in their minds.</p>
<h3>5. Stacked fee</h3>
<p>You must pay stacked fees if you seek financial advice directly from an asset management company. Several companies may charge this fee and then invest your money into third-party securities. These securities also come loaded with management fees, and you may end up paying the advisory cost twice. Hence, you must choose such an option carefully.</p>
<h2>How to negotiate for a lower fee with the advisor</h2>
<p>You are well within your rights to negotiate a financial advisor&rsquo;s fee but you need to explain why you feel the fee is too high and give valid reasons for the advisor to take you on as a client for a lesser fee that he usually charges. You can ask for fewer services offered by the advisor and use that to justify a lower fee or bring in a sizable portfolio that the advisor would like to manage so you will have more control over the charged fee.</p>
<h2>To conclude</h2>
<p>&nbsp;When looking for a financial advisor, keep in mind that the one who charges the least fee may not be the right advisor for you. Your decision should be based on which advisor offers you the best value. Ascertain which services you require and how much they are worth to you. If your current advisor provides you the best value, stick with him. However, if that is not the case, you can look for a new financial advisor who can help you meet your financial needs and attain your present and future financial goals and objectives.</p>
<p>Use the <a href="https://www.financialplanners.net/match-advisors/search-by-zip?cta=find-planner-home-page" target="_blank"><strong>free advisor match tool </strong></a>to connect with experienced and certified advisors who will help you manage your money effectively and best fit your budget. Please provide us with basic details about yourself, and the match service will connect you with some of the best and most affordable financial advisors who might aid you with your investments.</p>

It is crucial to conduct a financial advisor fee comparison before hiring. Explore different kinds of financial advisor fee structures used by them to charge a fee.

What are the Different Types of Financial Advisor Fee Structures?

What Will You Be Charged if You Hire an Advisor?

<p>The importance of tax planning is often underestimated and overlooked. If not accounted for, taxes may end up eating a significant chunk of your prospective income and savings. Thus, proper financial planning is essential for achieving short-term and long-term financial goals and staying clear of any significant tax implications. <a href="https://www.financialplanners.net/match-advisors/search-by-zip?cta=find-planner-home-page" target="_blank"><strong>Consult with a professional financial advisor</strong></a> who can help you make wise decisions about your taxes, assets, and liabilities, including investments, retirement plans, insurance policies, mortgages, and more. In the long run, these professionals can help save you money on taxes by employing strategies that minimize or eliminate tax liabilities.</p>
<p><strong>Read more to learn the impact of financial planning on your tax liabilities. </strong></p>
<h2>What is tax liability?</h2>
<p>Tax liability refers to the amount of money that you have to pay in taxes for a given tax year. It is calculated based on your taxable income, holdings, and estimated taxes. The tax is payable on all earnings and may be applicable at federal, state, and local levels.</p>
<p>Most people have a federal tax liability unless their income is below a certain threshold for filing a tax return. The tax liability is higher in the case of high-income individuals. Many people also don't realize that their tax liability is not just dependent on their income but also on their investments. For instance, your investments in stocks and bonds, mutual funds, real estate, etc., all attract different tax rates.</p>
<p>If you're unsure of your tax liabilities, you should check with your accountant or financial advisor.</p>
<h2>How is tax liability calculated?</h2>
<p>The calculation of tax liability for salaried individuals is relatively straightforward. Subtract the total tax deductions from your taxable income and the difference will be counted as your total tax liability. <br /><br />On the other hand, tax computation may be severely complex for business owners, high-income individuals, and self-employed individuals. This can be attributed to having multiple assets and income streams. Hiring a tax advisor or a comprehensive financial planner may go a long way toward beating tax stress and minimizing your tax liabilities.</p>
<h2>How to reduce tax liability with proper financial planning</h2>
<p>A tax advisor or a comprehensive financial planner will assess your age, time left for retirement income, assets, liabilities, financial goals, and other aspects to design a financial plan to help you minimize your tax liability. <a href="https://www.financialplanners.net/articles/7-important-factors-of-financial-planning" target="_blank">Proper financial planning</a> can also help maximize the amount you save for your retirement.</p>
<p><strong>Some options that tax advisors suggest for minimizing tax liability include:</strong></p>
<h3>1. Claim all eligible deductions, credits, and exemptions</h3>
<p>The IRS has made provisions to claim federal tax credits and deductions on income and savings, family and dependents, healthcare costs, education costs, and even investments. If you are eligible for any of these, you can claim them on your tax return and get your money back. It is also a good idea to keep track of the amount being withheld every month. Claiming all available and applicable tax credits can help minimize your tax liability.</p>
<h3>2. Increase contributions towards retirement accounts</h3>
<p>Saving for retirement is a common goal that most people work towards. Maxing out your annual contributions to your retirement accounts is a great way to save more for retirement and reduce your taxable income. Contribution limits and tax savings vary based on the retirement account (401k, traditional IRA, Roth IRA, etc.,) chosen by you. For instance, the money you contribute to an employer-sponsored 401(k) is deducted from pre-tax dollars, and the tax you pay on that money will depend on the rate prevailing at the time of withdrawal. On the other hand, the contributions to Roth IRA are made after paying taxes, hence, you do not pay any tax at the time of making a withdrawal.</p>
<p>Proper financial planning considers all factors to determine a tax strategy that best suits your financial goals and needs.</p>
<h3>3. Make donations to qualified charitable organizations</h3>
<p>Donating to qualified charitable organizations throughout the year can make you eligible to claim tax-deductible donations while filing tax returns. Doing so can considerably lower your tax bill.</p>
<h3>4. Use debt to lower your taxes</h3>
<p>Proper financial planning can help you avoid penalties and interest charges when using credit cards, loans, or other forms of debt financing. Tax laws allow many types of debt to be deducted from income in order to lower the amount of taxes owed by the borrower.</p>
<h3>5. Sync your cash flow &amp; file for tax refunds at appropriate time</h3>
<p>Your <a href="https://www.financialplanners.net/articles/cash-flow-vs-goal-based-financial-planning" target="_blank">cash flow</a> may differ based on your income, type of employment, insurance plans, investments, and more. Here synchronizing your cash flow can help you employ better tax strategies.</p>
<p>Additionally, meticulous and accurate tax planning can help eliminate tax liabilities. This can be achieved by reducing taxable income, increasing deductible expenses, or both. Reduced taxable income can result in lower tax liability, which can translate to higher refunds. Financial planning can help ensure you file for refunds in a timely manner.</p>
<h2>What are the advantages of proper tax planning?</h2>
<p>The tax benefits of proper financial planning are not just limited to the amount of money you save but also the amount of time you save. Your financial planner will advise you on how much you need to save for retirement and other important goals like buying a home, paying for college, etc.</p>
<p>The tax advisor can also help you develop a budget to keep track of your spending habits and ensure that each month goes as planned. When you know where all of your money is going, it can help you avoid unnecessary expenses and make sure that every dollar counts.</p>
<h2>Should I hire a financial advisor for tax planning?</h2>
<p>The importance of tax planning cannot be stressed enough. The tax laws are constantly changing, which means that the rules of taxation frequently change as well. However, it's also important to remember that this is a complex area of law and can quickly get out of hand if you don't seek a professional&rsquo;s help. If you're not familiar with tax laws, it can be challenging to know what to do or how to proceed. That's where a financial advisor can come in handy. A good financial advisor will be able to explain how different tax strategies work and what they mean for your tax liability and your overall financial situation.</p>
<h2>To summarize</h2>
<p>An exhaustive financial plan takes into account your income, savings, tax liabilities, and investments to create an overview of your finances. The tax liability you pay is based on your income, available deductions, and the amount of money you have in your accounts. You may be attracting penalties if you do not pay your taxes on time or delay filing them. It is best to have a dependable financial plan in place to account for your tax liabilities and live a stress-free life. Consult your tax advisor for the proper guidance on all nuances of taxes and ensuing tax implications.</p>
<p>Use <a href="https://www.financialplanners.net/match-advisors/search-by-zip?cta=find-planner-home-page" target="_blank"><strong>the free advisor match tool </strong></a>to match with an experienced and certified financial advisor who will be able to guide you effectively on how to reduce your taxability with the help of proper tax and financial planning. Give us basic details about yourself, and the match service will connect you with 1-3 professional financial fiduciaries that may be suited to help you.</p>

Taxes may end up eating a large chunk of your prospective income and savings. Learn how proper financial planning can help you reduce your tax liabilities.

Importance of Proper Financial Planning to Reduce Tax Liabilities

What Happens to Your Tax Liability With Proper Financial Planning?

<p>Financial planning is an essential piece of the puzzle to solving your financial concerns. Whether you want to save for a car or for your retirement, you need to plan for it in advance. Some goals may require a long-term strategy, while others can be fulfilled with a few months of savings. Some financial goals may not necessarily be about saving money but protecting it from taxes. All of these concerns and more can be addressed with a customized financial plan.</p>
<p>Financial planning is a broad concept that includes a number of tasks. You can devise a plan for different&nbsp;areas of financial planning, such as tax planning, budgeting, estate planning, retirement planning, and business succession if you are a business owner and more. If you require help coming up with an exhaustive financial plan that would take care of your different financial planning needs, <a href="https://www.financialplanners.net/match-advisors/search-by-zip?cta=find-planner-home-page" target="_blank"><strong>reach out to a professional financial advisor</strong></a> who can advise you on the same. The ultimate financial plan can include the fields that you need help with, so you can pay attention to the areas that are important for your financial security.</p>
<p>Here are&nbsp;7 key areas of personal financial planning<strong>.&nbsp;</strong>Keep reading to know about each of them so you can make a plan based on the components that align with your needs.</p>
<h2>Key areas of personal financial planning</h2>
<h3>1. Budgeting:</h3>
<p>Budgeting is one of the most basic yet critical fields in financial planning. It can be the foundation of your plan and set the course for several other areas of financial planning. Budgeting refers to segregating your income into multiple heads, like expenses, savings, and investments. A budget can help you streamline your expenditure. It also enables you to create a roadmap for the future and instills financial discipline. A lot of people struggle with money management because of the lack of a budget. They end up spending aimlessly and saving and investing inconsistently. This negatively impacts their long-term financial stability. Having a budget can solve these issues.</p>
<p>When you create a budget, you allot a fixed percentage of your salary for every essential and non-essential item. For instance, you can plan to use 50% of your salary on your necessary expenses like groceries, gas, electricity, etc. 30% can be used for savings and investments, and the remaining 20% for non-essential expenses, such as travel, dining out, shopping, etc. This way, you can ensure that all your needs are met, and you save a portion of your income for your future requirements no matter what. The budget will also ensure that you stick to this arrangement month after month, irrespective of other external factors.</p>
<p>Financial discipline and regularity are perhaps the most crucial attributes for an investor and a budget can guarantee consistency in the long run.</p>
<h3>2. Investment planning:</h3>
<p>Investment planning can make or break your future in many ways. It is crucial to invest your money to cover your goals, be financially secure throughout life, <a href="https://www.financialplanners.net/articles/how-financial-advisors-can-help-clients-prepare-for-future-inflation" target="_blank">counter inflation</a>, etc. However, with multiple investment options in the market, picking the right ones can be a bit confusing. Your investment portfolio must ideally align with your risk appetite, needs, budget, and age at all times. This can be done by sound investment planning.</p>
<p>Investment planning can include creating an asset allocation strategy and investing in the right combination of stocks, bonds, cash, gold, real estate, etc. It also involves picking the correct retirement accounts from a 401k, an Individual Retirement Account (IRA), pension plans, etc. The choice of investments within these accounts also plays a considerable role in your future financial security. Further, investment planning can include diversification strategies, contribution and withdrawal strategies, risk management, and more.</p>
<h3>3. Tax planning:</h3>
<p>Taxes are a compulsory expense that hampers your overall earnings. They are one of the <a href="https://www.financialplanners.net/articles/7-important-factors-of-financial-planning" target="_blank">primary&nbsp;areas of financial planning</a>&nbsp;and deserve your due attention. Income, capital gains, dividends, inheritance, etc., can be subjected to different types of taxes. Moreover, the tax slabs can change over time. The government can also add or remove some provisions and change tax laws and tax brackets. Therefore, tax planning is essential. Tax planning can help you pick the proper tax-advantaged accounts for retirement, healthcare, and more. It can also be helpful in estate planning.</p>
<p>While it may seem like there is no way to reduce or eliminate your tax liabilities, there are several ways to save on taxes. Tax loss harvesting can be used to offset your losses against the profits and lower taxes. Additionally, you can use lifetime gift exemptions to pass on your wealth to your children without incurring estate or inheritance tax. Some states may have less or no tax than others. So, relocating can also be an excellent way to reduce taxes, especially in retirement.</p>
<h3>4. Education planning:</h3>
<p>Education planning is essential for parents. If you have children or are planning to have them in the future, you will need to take a good look at your expenses. Right from the costs of clothes, and healthcare to education, there are several additional expenses that you may have to deal with as parents. Education, in particular, can be one of the most concerning factors. The costs of higher education are skyrocketing by the day. If your child plans to attend college or a private school, you may find it hard to cover the costs out of your salary; therefore, starting planning from a young age may be advised. You can use the 529 savings accounts for education expenses. This is a tax-advantaged account that is specifically designed for students and parents. You, as well as the child&rsquo;s grandparents, aunts, uncles, and even family friends, can contribute to the account. However, you can only use the money for qualified education expenses. If not, you will incur a 10% penalty and be subjected to federal income tax.</p>
<p>Parents can also use an IRA for qualified education expenses. However, it is essential to note that while the IRA can be used for education planning, it is primarily a retirement account. So, it is advised only to use it for your children if your other retirement accounts are sufficient for your retirement needs. Using your retirement fund can be detrimental to your future. So, make sure to plan in advance and make an informed choice on the matter.</p>
<h3>5. Retirement planning:</h3>
<p>Retirement is one of the essential aspects of a financial plan. It is a time in your life when you can be in your most vulnerable state. Your age and health may not allow you to work and earn money. You may also not find adequate work opportunities. Moreover, retirement can be long. It can easily account for 20 to 30 years of your life, sometimes even more. Therefore, you must save enough for it. Retirement planning can help you save for your future needs, grow the value of your money to beat inflation, and offer you the chance to live a financially comfortable and dignified life for as long as you live.</p>
<p>Retirement planning can include using instruments like the IRA, 401k, Health Savings Account (HSA), annuity plans, etc., to secure your future. For instance, if you are saving in a 401k, you can aim to maximize your contributions every year. This can help ensure that you get your employer&rsquo;s match and are able to save more in the long run. Retirement planning can also involve choosing between a Roth and a traditional account. For instance, a Roth IRA will not be taxed in retirement. So, if you foresee a high tax bracket in the future, you may choose this.</p>
<p>On the other hand, a traditional IRA will be taxed in retirement but not before. So, if you are in a higher tax bracket now, you can opt for it and push your tax liabilities to the future. In addition to this, retirement planning can help you plan your withdrawals in retirement and understand the rules of Required Minimum Distributions (RMDs), too.</p>
<h3>6. Estate planning:</h3>
<p>Estate planning is another one of the critical&nbsp;areas of financial planning. Your estate can include your physical and financial assets like your home, business, retirement accounts, insurance plans, mutual funds, stocks, bonds, gold, collectibles, etc. All of these may be under your ownership right now, but you may want to leave them to your spouse or kids after you. This requires creating a will, adding nominees to your investment accounts and insurance plans, building a trust for minor children, etc. You can also set up health directives for the future when you may not be capable of making financial and other important life decisions yourself. All of these things are essential to protect your money and the financial interests of your loved ones. The absence of an estate plan can put your family in a lot of turmoil. It can also lead to probate and unnecessary legal fees. So, try to be as efficient as you can to ensure that your loved ones are protected in your absence. Estate planning can be even more critical if you have been married more than once. So, make sure that your will states your current wishes and that the names of the beneficiaries are updated to reflect your current family members.</p>
<h3>7. Insurance planning:</h3>
<p>Insurance can offer financial security and stability against several odds. There are several types of insurance plans that can be used according to your needs and responsibilities. For instance, life insurance can offer the grieving family some financial cushion to carry on with their lives. It can be particularly important for the chief earnings members in a family. It is also essential for single parents. Likewise, health insurance is a must for access to quality healthcare. Medical expenses are among the highest for the average individual. Even minor illnesses and treatment can sum up to a few thousand dollars. The expenses can further double if you suffer from a severe injury or a critical illness. Some diseases can also require long-term care and create post-hospitalization costs. All of these can be covered with health insurance. So, make sure to get adequate insurance for yourself and your spouse and children.</p>
<p>Some other essential insurance plans can also include car insurance, jewelry insurance, homeowners insurance, travel insurance, and more. You can purchase these according to your possessions.</p>
<h2>To conclude</h2>
<p>It is critical to understand that financial planning is a vast topic that includes several more minor aspects. This is why everyone&rsquo;s financial plan differs from the other person's. Your individual financial plan does not necessarily have to include all of these components. However, it should be customized to your needs. For instance, if you do not have children, you do not need to worry about their future expenses. So, you would not require a 529 savings account. Contrarily, retirement planning may be essential for everyone. Irrespective of what you do for a living, you will retire one day. So, plan your financial needs after carefully evaluating your unique goals.</p>
<p>If you find any issues, you can consider hiring a&nbsp;financial advisor&nbsp;in your city and discuss the&nbsp;key areas of personal financial planning<strong>.&nbsp;</strong>Use the <a href="https://www.financialplanners.net/match-advisors/search-by-zip?cta=find-planner-home-page" target="_blank"><strong>free advisor match service</strong></a>&nbsp;to match with 1-3 advisors suited to meet your financial needs and goals.</p>
<p>For additional information on how you can effectively manage your financial plan to suit your future financial goals, visit <a href="http://www.dashinvestments.com/">Dash Investments</a> or email me directly at <a href="mailto:dash@dashinvestments.com">dash@dashinvestments.com</a>.</p>
<h2>About Dash Investments</h2>
<p><a href="https://www.dashinvestments.com/">Dash Investments</a> is privately owned by <a href="https://www.financialplanners.net/financial-advisors/california/woodland-hills/dash-investments/1873850">Jonathan Dash</a> and is an independent investment advisory firm, managing private client accounts for individuals and families across America. As a Registered Investment Advisor (RIA) firm with the SEC, they are fiduciaries who put clients&rsquo; interests ahead of everything else.</p>
<p>Dash Investments offers a full range of investment advisory and financial services, which are tailored to each client&rsquo;s unique needs providing institutional-caliber money management services that are based upon a solid, proven research approach. Additionally, each client receives comprehensive financial planning to ensure they are moving toward their financial goals.</p>
<p>CEO &amp; Chief Investment Officer <a href="https://www.financialplanners.net/article/author/founder-at-dash-investments-jonathan-dash-chief-investment-officer">Jonathan Dash</a> has been profiled by The Wall Street Journal, Barron&rsquo;s, and CNBC as a leader in the investment industry with a track record of creating value for his firm&rsquo;s clients.</p>

Explore the top key areas of financial planning and know about each of them so you can make a plan based on your personal financial needs and goals.

Key Areas of Importance for Financial Planning and Goals.

7 Key Areas Where Financial Planning Is Important

<p>A financial plan is a document that contains your financial goals, strategies to achieve those financial goals, your current financial situation, debt liabilities, and more. All in all, it serves as a guide to financial freedom. You can create a financial plan as early as in your 20s or when you first start working and have a steady flow of income. However, creating a financial plan is only half the job done. It is also essential to go back to your plan and modify it when time demands.</p>
<p>A <a href="https://www.financialplanners.net/articles/key-components-of-a-good-financial-plan" target="_blank">financial plan</a> is supposed to reflect your wants and needs. And since your wants and needs can never be the same,&nbsp;your financial plans need to&nbsp;be updated from time to time. In addition to this, the variables surrounding your financial plans also tend to change. For instance, the market forces are bound to fluctuate every now and then. Economic cycles are also continuously altering. Your income will not likely remain the same either. You may earn more or less depending on several factors, such as experience, age, skills, etc. So, a periodic review of your financial plan is advised. You may <a href="https://www.financialplanners.net/match-advisors/search-by-zip?cta=find-planner-home-page" target="_blank"><strong>reach out to a professional financial advisor</strong></a> who can assist in carrying out a periodic review of your financial plan.<br /><br />Given the hectic schedules of today and the race against time, it can be hard to revisit your investment portfolio regularly. Nevertheless, there are some situations where reviewing your portfolio and the financial plan becomes imperative. Keep reading to find out more.</p>
<h2>How often should you review and update your financial plan?&nbsp;</h2>
<p>Here are some situations where you can consider reviewing and updating your financial plan:</p>
<h3>1. When you get married:</h3>
<p>Getting married can have a bigger financial impact on you than you can foresee. The apparent changes like dual incomes, more financial liquidity, and a better standard of living are what most people concentrate on. However, getting married has several other effects on your finances. Firstly, your tax liabilities can change. When you are married, you can file your taxes under the 'married filing jointly' category or the 'married filing separately' category. If you file your taxes jointly, you may be able to get better tax breaks. You can get several tax credits like the earned income tax credit, child and dependent care tax credit, American opportunity and lifetime learning education tax credits, etc. It is important to note that the method you choose will determine how much you are able to save in tax per year. Based on this, you could have higher or lower savings, which in turn could affect your investment budget.</p>
<p>Getting married can also impact your household expenditure. If your spouse spends more than you or has a more luxurious lifestyle, you could have fewer savings than you did before. This can again impact your investment budget and the type of investments you can add to your portfolio. Your combined risk appetite increases if both spouses are young and earning well. Contrarily, if your spouse is older, nearing retirement, or not earning as well, you may want to follow a more stable or low-risk investment approach. Another thing to focus on is debt. Do you or your spouse carry high debt? If yes, you may want to focus on paying off your high-interest debt before you maximize your investments. So, when you get married, go through your investment portfolio and style and align your investments accordingly.&nbsp;&nbsp;</p>
<h3>2. When there is a change in your job:</h3>
<p>Effective financial plans should&nbsp;reflect the changes in your income. An increase or decrease in your salary can alter your risk appetite and choice of investments. It can also dictate your investment budget. For instance, if you are in a high position and drawing a steady income, you may be more at ease experimenting with high-risk investment options, such as direct equity. However, if your salary is lowered due to a recession, you may want to move your money to relatively safer options. For instance, you may consider equity mutual funds instead of direct equity. You may also like to transfer some money to liquid accounts to be prepared in the case of a complete loss of a job. A change of job can also be an excellent time to review your financial plan as your 401k contributions may alter. If your new employer offers you a higher match, you may also want to maximize your contributions. For 2022, you can contribute up to $20,500 per annum if you are below 50. With the employer match, you can contribute a total of $61,000 below the age of 50. The contribution limits for those aged 50 or older are increased to $27,000 individually and $67,500 for employer + employee contributions. This is a significant amount of money. If you receive such an employer contribution, it may be in your favor to contribute more to your 401k and make the most of these high figures for as long as possible.</p>
<h3>3. When you have children:</h3>
<p>The expenses of a family considerably increase when there is a new member on the way. Starting from healthcare to education, a child needs adequate funds throughout life. This may call for some adjustments to your financial plan. A&nbsp;financial planning review<strong>&nbsp;</strong>at this time can help you understand your child's financial requirements properly. Based on your findings, you may have to move your money around. For instance, if you had a travel fund before having a child, you may have to convert it into an education fund for your child. Most parents add a 529 education savings plan to save for their child's future education expenses. 529 accounts are tax-advantaged, state-sponsored plans that can be used to cover the costs of college education, K 12, as well as apprenticeship programs.</p>
<p>In addition to this, having a child also requires modifications to other components of a financial plan, such as your estate plan, insurance, and more. If you have not yet made a will, creating one becomes critical when you have children. Make sure to distribute your assets among your children after careful evaluation. In the case of minors, trusts can also be very helpful. Trusts offer you considerable power in relation to how your money is used or spent in your absence. You may also want to invest in insurance. If you have a health insurance plan, you can add your children to it. You can also get a new health plan for them. Additionally, you can consider buying life insurance to protect your children after you.&nbsp;</p>
<h3>4. When you have a specific goal in mind:</h3>
<p>Every goal is unique and requires a different approach. Usually, most people create a generalized financial plan to chase after goals like retirement, house purchase, emergency needs, etc. However, there may be times in life when some of these goals may be more important than others. For example, if your present concern is high-interest debt, your focus can be on eliminating debt and not buying a house. Likewise, if you are retiring in five years, your focus can be to ensure sufficient retirement funds rather than saving adequate funds to travel in retirement.&nbsp;Financial plans need to<strong>&nbsp;</strong>be updated to incorporate a pending need. So, if you have a child ready for college in the next five years, you may want to focus on your 529 savings. In this regard, you may have to contribute more to this account. You may also ask the child's grandparents to contribute to it.</p>
<p>Additionally, you can cut down on other contributions and expenses for the duration to concentrate on a singular goal. So, if the goal is to put a child through college, you can increase your 529 contributions. You can also increase your Individual Retirement Account (IRA) contributions, as IRA funds can be used for qualified expenses, such as education. Besides, you may want to improve your credit score, too. If you have to take a student loan along with your child, your credit score will help you in getting a good interest rate.</p>
<p>These changes in a financial plan may be short-lived until you achieve your goal. However, making them at the right moment is essential.</p>
<h3>5. When getting a divorce:</h3>
<p>Just as you may combine several aspects of your finances with your spouse when you get married, a divorce is a time when all or most of your joint finances would require sorting out. Divorce or separation not only brings about changes like splitting savings accounts or filing your taxes separately. You may also incur additional expenses, such as lawyer fees, alimony, child support, etc. If you are going through a divorce, you would have to change the beneficiaries of your accounts, such as the 401k, IRA, and also insurance plans. If you have spousal insurance cover, you may have to get a new insurance plan for yourself. Your estate plan would also need to be revised, as you may want to remove your ex-spouse from any distributions. You may also want to change beneficiaries, such as your children or your spouse's children. Your tax projections would alter as well, and so would your monthly budget.</p>
<p>A divorce can be messy sometimes. So, getting professional assistance in the matter may be recommended. You can consider hiring a financial advisor.&nbsp;Financial advisor reviews&nbsp;and general guidance can be valuable at such a time. An advisor can help you split your finances, plan your life and future financial goals individually, and sort out the legal hassles if any.</p>
<h3>6. When inheriting money:</h3>
<p>Inheritance from a parent, grandparent, or relative can boost your financial health. However, this can only be true if you use your inheritance prudently. The way you use your inheritance can be decided on the basis of your immediate needs and goals. For instance, if you have a lot of debt, it may be wise to use the inherited money to pay off your loans. If you do not have any debt, you may invest the money for future goals, such as buying a house. In addition to this, it is crucial to understand the tax implications of your inheritance, too. Estates worth $12.06 million or more are levied with a federal tax. Some states may also charge an inheritance tax. The type of assets you inherit also determines your future financial plan or strategies. For example, if you inherit a traditional IRA, you would be liable to pay tax on your withdrawals, just like the account's original owner. However, if you inherit a Roth IRA, you would not pay any tax on it. Likewise, tax rules may also differ for spouses and children.</p>
<p>It may be advised to consult with a professional financial advisor. Inheritances, especially large ones, can be challenging to handle. The legal stipulations and tax provisions can be hard to understand. So, instead of losing money to poor decisions, it may be better to hire an expert.&nbsp;</p>
<h3>7. Once a year:&nbsp;</h3>
<p>A&nbsp;financial planning review&nbsp;is not always necessary when you have a significant life event or goal. It is also vital when things may seem mundane. Typically, financial advisors recommend reviewing your portfolio and plan every few months to once a year. This can automatically help you take cognizance of changing incomes, economic cycles, goals, life stages, and more. Moreover, this can be a good practice or habit to follow. Many a time, you may be occupied with life to note the changes mentioned above from a financial standpoint. However, if you make it a point to review your portfolio every year or go through your financial plan periodically, you can proactively make the required changes and be up to date all the time.</p>
<h2>To conclude</h2>
<p>There is no precise answer to&nbsp;how often you should review your financial plan<strong>.&nbsp;</strong>Typically, it should be as often as your life or circumstances demands it. If you frequently change your jobs and earn different incomes from each, you may need to do it more often. You may have to do it if you have been married, divorced, widowed, or separated lately. Likewise, if you have had children, received an inheritance, etc., you would benefit from taking a look at your finances. It can also help to revisit your financial plan every six months to a year as a precautionary method.</p>
<p>However, what is more important is to do this activity under professional guidance from a financial advisor. An advisor can help you make the right changes to your plan that offer future long-term benefits and financial security. Use the <a href="https://www.financialplanners.net/match-advisors/search-by-zip?cta=find-planner-home-page" target="_blank"><strong>free advisor match service</strong></a>&nbsp;to match with 1-3 advisors suited to meet your financial requirements.<br /><br />For additional information on the most suitable financial planning strategies for your needs and goals, visit <a href="http://www.dashinvestments.com/">Dash Investments</a> or email me directly at <a href="mailto:dash@dashinvestments.com">dash@dashinvestments.com</a>.</p>
<h2>About Dash Investments</h2>
<p><a href="https://www.dashinvestments.com/">Dash Investments</a> is privately owned by <a href="https://www.financialplanners.net/financial-advisors/california/woodland-hills/dash-investments/1873850">Jonathan Dash</a> and is an independent investment advisory firm, managing private client accounts for individuals and families across America. As a Registered Investment Advisor (RIA) firm with the SEC, they are fiduciaries who put clients&rsquo; interests ahead of everything else.</p>
<p>Dash Investments offers a full range of investment advisory and financial services, which are tailored to each client&rsquo;s unique needs providing institutional-caliber money management services that are based upon a solid, proven research approach. Additionally, each client receives comprehensive financial planning to ensure they are moving toward their financial goals.</p>
<p>CEO &amp; Chief Investment Officer <a href="https://www.financialplanners.net/article/author/founder-at-dash-investments-jonathan-dash-chief-investment-officer">Jonathan Dash</a> has been profiled by The Wall Street Journal, Barron&rsquo;s, and CNBC as a leader in the investment industry with a track record of creating value for his firm&rsquo;s clients.</p>

Due to fluctuating market trends, you need to update your financial plan regularly. Find out how often you should go for a financial planning review and update.

How Often to Go for a Financial Planning Review and Update?

How Often Should You Review and Update Your Financial Plan?

<p>Financial planning is critical for all people. Financial planning can be vital for everyone regardless of age, income, or gender. However, it can be more crucial for some groups than others. If you look at the gender gap, you will notice that for every dollar earned by men, women earn only 82 cents. While there may be exceptions to this, and not all women earn less than men, most women have to work longer and put in more effort than men to make the same amount of money as them by the end of their careers. Women may also have to take sabbaticals due to childbirth and postpartum issues, which can come in the way of their careers and ultimately impact their financial standing.</p>
<p>This is why&nbsp;financial planning for women<strong>&nbsp;</strong>is important. Financial planning can help women bridge the income gap that exists in the workplace. It can empower women to be better planners and control their money on their own. Above all, it can give them a sense of financial freedom to carry on with their lives as they see fit. Women also may not always have customized professional guides to refer to that cater to their unique challenges, needs, investing styles, and future goals. If you need help with financial planning that specifically focuses on the financial needs of women, <a href="https://www.financialplanners.net/match-advisors/search-by-zip?cta=find-planner-home-page" target="_blank"><strong>reach out to a professional financial advisor</strong></a> who can guide you on the same.</p>
<p><strong>To simplify this, here is a&nbsp;financial planner for women&nbsp;for all life stages that can help you be financially independent: </strong></p>
<h2>1. Early years of working:</h2>
<p>The first of the many&nbsp;personal finance life stages&nbsp;is when you start working. This can be a time when you may have student debt to deal with, a starting salary that could likely be the lowest you would ever earn, and a lack of enough information to plan ahead. This is also a very critical time. People who start saving and investing in their 20s and 30s can be far more at ease financially than those who waste these years and start saving later in life.</p>
<p>The primary focus in these years for you can be to get rid of your student debt as soon as you can. Student loans are high-interest debt that can drill a hole in your pocket and come in the way of your savings. So, the sooner you settle it, the quicker you can move on to the next step. Try to divide your salary into debt repayments, expenses, and savings. While it may be hard to prioritize savings at this point, saving your money and creating an emergency fund are crucial. Young people and career starters are the most dispensable in a company. So, companies are the first to let them go if an economic crisis like a recession occurs. With minimal experience, it can be hard to find a new job. Therefore, keeping an emergency fund that can support you for a few months is essential. Additionally, the emergency fund can also be helpful in the case of a health emergency or any other unexpected financial need that may crop up unannounced. Another benefit of having an emergency fund is that you do not need to depend on more debt in the form of credit cards and loans to cover emergencies.</p>
<p>Insurance is also a critical part of a <a href="https://www.financialplanners.net/articles/8-financial-planning-steps-to-take-to-help-ensure-financial-wellbeing" target="_blank">financial plan</a> at this stage. Insurance premiums are the lowest when you are young. Health insurance, life insurance, renter's insurance, car insurance, etc., are all vital financial tools that you can buy to keep yourself covered against unfortunate eventualities.</p>
<h2>2. Mid-career years&nbsp;</h2>
<p>Your late 30s and 40s may be slightly more stable than your 20s and early 30s. By now, you may have found your calling in life. You would likely have a steady salary, some savings, and ideally, no more student debt. This can be a time to focus on saving and investing your money.&nbsp;Financial planning for women<strong>&nbsp;</strong>at this stage can include maximizing your workplace retirement account, like the 401k. In 2022, you can contribute up to a maximum of $20,500 if you are under the age of 50. If you are aged 50 or older, you can make a catch-up contribution of $6,500 over the primary contribution and contribute up to a maximum of $27,000. Besides, since employers can also contribute to a 401k account, the maximum joint contribution by the employer and employee under the age of 50 can be up to $61,000. In the case of an employee aged 50 or more, the maximum joint contribution by the employer and employee can be $67,500. This can be a good time in your career to maximize these contributions and reap the fruits later. You can also max out an Individual Retirement Account (IRA) if you do not have a workplace retirement account. Although the contributions for an IRA are relatively low at $6,000 for those under 50 and $7,000 for those aged 50 or older, an IRA can still be a convenient tool for long-term savings. In addition to this, you can also invest in other tax-advantaged accounts like the Health Savings Account (HSA) to secure your retirement against medical expenses.</p>
<p>If you have children, you may have additional expenses like their healthcare, basic needs like clothing, etc. The expenses of your children will only likely grow with time. Higher education costs are one of the biggest concerns for parents. If you are a single mother, the responsibility further increases. One of the best ways to save for your child's future expenses can be with a 529 savings account. A 529 education account is a tax-advantaged account that is uniquely designed for higher education savings. The account can be used to cover K-12 education and apprenticeship programs. States run these plans, and so their rules may differ from one state to another. Therefore, it is best to check your state's regulations before you start saving for the future.</p>
<p>Make sure to continue maintaining an emergency fund during this phase as well. With the responsibility of children, the relevance of an emergency fund is further magnified in&nbsp;financial planning for women.</p>
<h2>3. Early retirement years:</h2>
<p>Your early retirement years can be critical in your life. These are the years that can largely shape your retirement. They can prepare you for it and help you transition into it slowly. If you plan to retire in your 60s, your 50s can be a time when you evaluate your savings and investments. You can look for any shortcomings and accordingly make amends. If you are falling short of your goals, you can also decide to postpone your retirement by a few years. Additionally, you can concentrate on paying off all your mortgages during this time. Entering retirement with any kind of debt can be challenging for your future financial safety. So, try to get rid of it during these years. Other than this, you can continue to max your contributions to tax-advantaged accounts like the IRA and the 401k. Considering the additional catch-up contributions, you can really use these years to your advantage and create a sizable corpus for yourself. With an extra $1,000 in an IRA alone, you can invest $10,000 in ten years from ages 50 to 60. For a 401k, you can invest an additional $65,000 in ten years. This can significantly help you make up for any lapses made in the previous years.</p>
<p>Another essential thing to consider at this stage is to plan a solid withdrawal strategy for your retirement. Saving your money is not enough, and you must also concentrate on how you would spend it. If you have a traditional 401k or IRA, you would be paying tax on your withdrawals in retirement. You would also have mandatory Required Minimum Distributions (RMDs) from the age of 72. So, having a withdrawal strategy in mind is essential. You can also <a href="https://www.financialplanners.net/match-advisors/search-by-zip?cta=find-planner-home-page" target="_blank"><strong>hire a financial advisor</strong></a> for this if you are unsure how to proceed. Moreover, if you think you would have a high tax outcome in retirement and would rather pay your tax now, you can consider a Roth conversion. By converting your traditional accounts to Roth accounts, you can get rid of your taxes in the present and enjoy tax-free withdrawals in retirement after the age of 59.5 years. However, you must know that conversions are taxed as ordinary income, and you would not be able to withdraw funds without incurring a 10% penalty for at least five years after the conversion. So, make this call after due deliberation.</p>
<h2>4. Retirement:</h2>
<p>Life in retirement can be peaceful and stress-free as long as you plan well. Your aim at this stage can be to use your savings optimally and not outlive them. All of your investments would now mature, so use them wisely. Try to curb your expenses wherever possible, as you did before, and focus on the future as much as you do the present. You can consider delaying your Social Security Benefits until the full retirement age to increase your benefits paycheck. It is also essential to have an estate plan in place. Irrespective of whether you have individual or joint assets, you can plan your estate to empower your future generations and ensure that your money and hard-earned assets are appropriately used in your absence. Besides this, you must keep note of long-term care options, assisted living facilities, household help, etc., as you may require them in the future. Being prepared for the worst is critical for all<strong>&nbsp;</strong>personal finance life stages, especially when you are old.</p>
<h2>Common tips that can be included in a financial planner for women:</h2>
<p>Women are often not extended the support to excel in life, which can be a roadblock in their financial journeys. Here are some common tips that all women can follow for their well-being:</p>
<h3>1. Learn to put yourself first:</h3>
<p>A lot of women, especially mothers, may not consider chasing their dreams. However, it is never too late to put yourself and your financial dreams first. Whether you want to start a business or chase after a position in a company, the right kind of planning can help ensure you live a life that can offer you comfort, happiness, and above all, a sense of accomplishment.</p>
<h3>2. Use your spare time to upskill yourself:</h3>
<p>Pay disparity is one of the women's most significant issues despite good education and experience. Upskilling can help you break some of these barriers. There are several online courses available as well as offline training options at workplaces as well as colleges. You can keep doing these short courses to learn new skills and stay relevant with changing times.</p>
<h3>3. Make wealth outside of your parent's and spouse's wealth:</h3>
<p>It is essential to take charge of your finances and create your own wealth no matter your age. Women must have money irrespective of their spouse, parents, siblings, or children. Moreover, it is also necessary to use the wealth you earn for your own financial security. A lot of women end up prioritizing their children or family's needs over their own. While you may contribute to your household expenditure, keeping your own goals in mind is vital.&nbsp;Financial goals for women&nbsp;can be to travel, buy a house, own collectibles, etc. Try to keep your goals distinct from those of your family and aim to achieve them. This can offer you peace of mind and happiness.</p>
<h3>4. Work with like-minded people:</h3>
<p>There are several organizations today that take workplace diversity and gender equality very seriously. While you may likely find those who may stall your growth, some may like to help you excel in life. Try to connect with people and organizations that are on a progressive path. This will help you get the right opportunities in life.</p>
<h3>5. Be disciplined:</h3>
<p>Discipline can take you farther in your financial journey than anything else. Try to be consistent with your savings and investments throughout life. No matter how little or how much you earn, fix a percentage of your salary and save and invest that money for your future needs. This will help you build a life for yourself slowly but steadily.&nbsp;&nbsp;</p>
<h2>To conclude</h2>
<p>Financial planning for women<strong>&nbsp;</strong>is highly crucial to ensure equality and equal opportunity for all genders. While measures are being taken to improve things on a grander level, small efforts by women to better their individual lives are also important. Women can aim to take charge of their finances and create the desired life for themselves. It can also help to get customized advice from a professional to get a better understanding of your goals and needs. Use the <a href="https://www.financialplanners.net/match-advisors/search-by-zip?cta=find-planner-home-page" target="_blank"><strong>free advisor match service</strong></a>&nbsp;to engage with a professional financial advisor who can help you become financially independent and create a robust financial plan that fulfills the financial needs of women. Based on your requirements, the service matches you with 1-3 advisors suited to meet your financial needs and goals.</p>
<p>For additional information on financial planning strategies women can use to grow and manage their finances, visit <a href="http://www.dashinvestments.com/">Dash Investments</a> or email me directly at <a href="mailto:dash@dashinvestments.com">dash@dashinvestments.com</a>.</p>
<h2>About Dash Investments</h2>
<p><a href="https://www.dashinvestments.com/">Dash Investments</a> is privately owned by <a href="https://www.financialplanners.net/financial-advisors/california/woodland-hills/dash-investments/1873850">Jonathan Dash</a> and is an independent investment advisory firm, managing private client accounts for individuals and families across America. As a Registered Investment Advisor (RIA) firm with the SEC, they are fiduciaries who put clients&rsquo; interests ahead of everything else.</p>
<p>Dash Investments offers a full range of investment advisory and financial services, which are tailored to each client&rsquo;s unique needs providing institutional-caliber money management services that are based upon a solid, proven research approach. Additionally, each client receives comprehensive financial planning to ensure they are moving toward their financial goals.</p>
<p>CEO &amp; Chief Investment Officer <a href="https://www.financialplanners.net/article/author/founder-at-dash-investments-jonathan-dash-chief-investment-officer">Jonathan Dash</a> has been profiled by The Wall Street Journal, Barron&rsquo;s, and CNBC as a leader in the investment industry with a track record of creating value for his firm&rsquo;s clients.</p>

Financial planning for women is important as it makes them financially free and empowered. Here is a financial planning guide for women at all stages of life.

Financial Planning for Women to Get Financial Independence

Financial Planning for Women At All Life Stages

<p>Financial compatibility is as important as mental, emotional, and physical compatibility. Even the happiest of couples find their relationship tested when it comes to money. Also, when you're with someone for the long haul, it can be tricky to figure out your financial future together. Should you share a bank account? Should you combine finances after marriage? What kind of retirement accounts will you have? Questions like these concern many couples.</p>
<p>While the responsibilities and obligations of marriage are many, few are as important as managing money together &ndash; efficiently and effectively. And to succeed financially as a couple, it is crucial to think about managing money as a team instead of as two individuals. Also, you'll need to consider several factors together, like differing levels of risk, debt, family obligations, children, and more which can impact your relationship with your partner. If you need guidance on how you can pool your finances to better manage your money and secure your financial future, <a href="https://www.financialplanners.net/match-advisors/search-by-zip?cta=find-planner-home-page" target="_blank"><strong>reach out to a professional financial advisor</strong></a> who can advise you on the same.</p>
<h2>Why is financial planning important for couples?</h2>
<p>Money issues are a common denominator when it comes to straining relationships. Lack of transparency with respect to finances can cause friction between a couple. Hence, it is important for couples to consider financial planning if they want to be on the same page as their partner.</p>
<p>One of the <a href="https://www.financialplanners.net/articles/key-components-of-a-good-financial-plan" target="_blank">key components of a financial plan</a> is to make sure that both partners are aware of each other&rsquo;s personal financial situations, such as income, savings, debt, future career opportunities, and more. Financial planning also involves making sure that both partners understand their fiscal responsibilities towards each other. Lastly, financial planning isn't just about budgeting; it's also about learning how to communicate effectively with your partner while showing each other mutual respect and appreciation. That said, it takes much more than simply discussing money to reach your combined goals successfully as a couple.</p>
<h2>What important considerations should couples make before starting with financial planning?</h2>
<h3>1. Should you combine your finances after marriage?</h3>
<p>While this is a common question that puts most couples in doubt, there isn't a right answer to this. The decision when and if to combine finances after getting married is a personal one. You need to consider several factors like your commonalities, present and future expectations when it comes to financial goals, a desire for financial security and stability, as well as whether you trust your partner when it comes to finances or not.</p>
<p>When deciding whether or not to combine finances, consider what each of you brings to the table &ndash; Do you both have similar financial goals? Do you share similar values and views on money?</p>
<p>There are certain benefits of combining your finances such as trust building, easy budgeting, and transparency;&nbsp; however, it also poses some challenges. You may feel a lack of control over your income or experience guilt while spending on your desires. Some couples also choose not to combine finances at all. For instance, if your partner has a poor credit history, is in debt, or has conflicting <a href="https://www.financialplanners.net/articles/9-good-financial-habits-to-improve-your-financial-success" target="_blank">financial habits</a>, it may be wise not to combine your finances. In the end, remember, this is an important decision that should be made after a careful consideration of both your current financial situations keeping your future goals in mind.</p>
<h3>2. How do I combine our finances after marriage?</h3>
<p>Different couples adopt different approaches to combining finances. While some pool in all the money and use it as required, others split expenses. Some couples also share expenses by contributing to a joint account and maintaining separate savings accounts. There can be numerous such combinations, depending on your circumstances. Once you have decided on a way to combine finances, you can set financial goals and decide on a timeline to achieve them.</p>
<p>To determine if combining finances after marriage is the right call for you, consider the pros and cons and consult with a financial advisor before making any decisions.</p>
<h2>How can couples comprehensively plan their finances?</h2>
<h3>1. Assess your combined net worth as a couple</h3>
<p>It is a misconception that net-worth analysis is only for the wealthy. A couple's net worth (sum of all assets they hold as a couple minus their liabilities) can be a good starting point for devising a robust financial plan. Putting a precise number on your combined assets and debt can help determine your financial health. Once all assets and liabilities are calculated, your financial planner can advise you on the way forward.</p>
<h3>2. Determine your financial goals as a couple</h3>
<p>A couple&rsquo;s financial goals will direct their financial planning. Couples need to have clear financial goals, both short and long-term. This could include buying a new house, funding your children&rsquo;s education, planning for retirement, and more. For instance, assume, as a couple, you plan to travel extensively after retirement. Now, this may require you to save more. This, in turn, will influence your retirement planning. Therefore, it's paramount that, as a couple, you determine your future financial goals together.</p>
<h3>3. Be honest with each other regarding your income and expenditure</h3>
<p>While discussing finances with your partner, do not just focus on income and expenses. Discuss any debt that you may have such as student loans, a trust, or a desire to buy a home. Both of you need to understand each other&rsquo;s views with respect to money and build towards a secure financial future. Having this discussion will also help you avoid any surprises later in the relationship.</p>
<h3>4. Secure your finances by adopting suitable saving strategies</h3>
<p>Spending every penny without proper planning can be detrimental to your financial health and future. Setting aside a fixed percentage of every paycheck can be a great way to manage your savings and expenses. Both partners can discuss and decide on a percentage. This strategy may work well for both salaried and self-employed individuals.</p>
<p>However, some couples also adopt unique saving strategies based on their understanding and comfort. Some of these include spending one partner's paycheck and saving the other's, deciding a fixed amount per partner to put into a joint account, dividing expenses and savings, and more. Whatever path you choose as a couple, it is important to keep financial security a priority always.</p>
<h3>5. Set up an emergency fund for a rainy day</h3>
<p>The most important financial planning rule is to always plan for a rainy day. Sudden medical expenses, business losses, job loss, and other emergencies often come unannounced. A couple's financial planning must account for such circumstances. This could include saving 3x or 6x of your annual income as an emergency fund, investing in low-risk assets, and more. Remember, an emergency can derail your finances faster than you may anticipate. Hence, accounting for emergencies while planning is always a wise move.</p>
<h3>6. Invest in insurance</h3>
<p>Insurance plans are arguably the most important investment you can make as a couple. Discuss health, life, term, long-term care and other insurance plans with your partner. You may also appoint your partner as a beneficiary on your insurance plan in case of a medical emergency or their demise. Keep a contingency plan handy to avoid any financial nightmares in the future. If you have children, insurance will help protect their future against unexpected circumstances.</p>
<h3>7. Devise your investment strategy as a couple</h3>
<p>Coming up with an investing strategy can be tricky for couples. You will have to contend with questions such as: How to build an investment portfolio with your partner? Should you choose passive investing or target aggressive trading? Should you opt for high-risk assets or play safe? Also, not every couple may have the same risk capacity or similar goals. For instance, a couple whose child would be moving to university in the next two years may not have the same risk appetite as a couple just starting their financial journey.</p>
<p>Thus, it may be wise to consult an investment advisor who specializes in investments and reach out to them for guidance. They will keep your risk tolerance, goals, and current financial situation in mind before devising a suitable investment plan.</p>
<h3>8. Keep track of your spending patterns as a couple</h3>
<p>One of the biggest challenges couples face when managing their finances is not knowing where their money is going. That's why tracking spending patterns is important so that you know where you are spending your money and how you can better spend and invest it. This can be done in several ways, such as using a tracking app or maintaining a note of all your monthly purchases and expenses.</p>
<h3>9. Plan your taxes and adopt tax saving strategies</h3>
<p>Irrespective of how robust your saving, investment, and spending strategies are, improper tax planning can slow down your financial progress. Thus, it is important to formulate tax-saving strategies that best suit your situation as a couple. These can include retirement plans and accounts, home-buying strategies, charitable donations, and more.</p>
<p>A pressing tax issue that married couples encounter is when they end up in different tax brackets. A couple with varying income levels could end up paying vastly different taxes when filing their returns. Another issue could be that of self-employment. If you are self-employed, you may not have access to the same benefits as employees, such as employer matches on 401(k) plans and matching retirement contributions.</p>
<p>Thus, it is critical that your tax strategies as a couple are charted out well in advance to make provision for any above-mentioned situations. Not to mention, it may also help you take advantage of every possible tax deduction and credit.</p>
<h3>10. Manage your will and estate</h3>
<p>Estate planning for couples can be overwhelming. One of the most important things to consider is who will have control over the couple's assets and property when they can no longer make their own decisions. Ensure that you have expressed your wishes early on and your estate plan clearly states your heirs and the division of your assets among your beneficiaries. A properly planned will and estate plan can ensure that your wishes are followed and that your loved ones are looked after your demise.</p>
<h2>To summarize</h2>
<p>Financial planning for couples is essential for a happy, stable, and successful relationship. Comprehensive financial planning can help couples secure their financial future, plan for retirement and emergencies both medical and financial, as well as pick the right investments. It also helps them to build assets and plan for big expenses. Lastly, financial planning can also help you better spend your money and where it can be best used.</p>
<p>Use <a href="https://www.financialplanners.net/match-advisors/search-by-zip?cta=find-planner-home-page" target="_blank"><strong>the free advisor match tool</strong></a> to match with an experienced and certified financial advisor who will be able to guide you effectively on financial planning for both you and your spouse and how best to combine your finances. Give us basic details about yourself, and the match service will connect you with 1-3 professional financial fiduciaries that may be suited to help you.</p>

Financial compatibility for couples is an important factor for happy married life. Read and learn how important is financial planning for couples after marriage.

Importance of Financial Planning for Couples After Marriage

Comprehensive Financial Planning for Couples

<p>As a business owner, you wear many hats. You are responsible for the day-to-day operations of your company, as well as its long-term success and growth. All this can make it difficult to focus on the financial well-being of the company. Now, that's where a financial advisor can come in and help you grow and manage your finances. A financial advisor can help you come up with a comprehensive <a href="https://www.financialplanners.net/articles/key-components-of-a-good-financial-plan" target="_blank">financial plan</a> that will take into account your business goals and objectives. These experts can also help ease some burden off your shoulders by providing expertise and guidance on a range of financial matters, from investments and creating an emergency reserve to insurance and tax strategies. <a href="https://www.financialplanners.net/match-advisors/search-by-zip?cta=find-planner-home-page" target="_blank"><strong>Reach out to a professional financial advisor</strong></a> if you wish to learn about how to grow your business and boost your margins.</p>
<p>Let us explore in detail what a financial advisor does and how they may be beneficial in helping you grow your business.</p>
<h2>What does a financial advisor do?</h2>
<p>A financial advisor is a trained and certified professional who provides advice and guidance on financial matters to individuals, families, and businesses. Financial advisors can help you attain a wide range of financial goals, including saving for retirement, buying a home, investing in a business, and much more. Financial advisors also help when it comes to choosing investments, retirement planning, insurance, and tax strategies. In other words, financial advisors help their clients make informed decisions about how to best use their money to achieve their financial goals. Business financial advisors can provide an expert perspective on your company's financial health and offer strategies to help you achieve your goals. Below are a few ways a financial advisor can help your business grow.</p>
<h2>How can a financial advisor help grow your business?</h2></br>
<h3>1. Assess business risk and find new growth opportunities</h3>
<p>No matter how big or small your business is, there is always some risk involved. A financial advisor can help you assess the risks your business faces and develop strategies to mitigate them. This will ensure that your business is prepared for any unforeseen challenges that may come along the way. This could range from changing business and funding scenarios to any economic movements that may impact your business.</p>
<p>At the same time, the best financial advisor for your needs will constantly be looking for new opportunities to help your business grow. This could be from investing in new technologies to expanding into new markets.</p>
<h3>2. Help you save money and invest wisely</h3>
<p>A financial advisor can help you identify areas where you can cut costs and save money. For example, they may suggest ways to negotiate better terms with suppliers or reduce your overhead costs. They can also help you create a savings plan for your business, in case of unexpected expenses or opportunities.</p>
<p>While business planning is important, one must not forget about investing, which is one of the most important aspects of growing your wealth. But, knowing where to put your money to gain the best returns can be difficult. Here, a financial advisor can help you understand the different types of investments and how each one works. They can also provide guidance on when to buy and sell investments, so you can maximize your profits.</p>
<h3>3. Help you create a budget</h3>
<p>If you don't have a plan for your business, it may get difficult to track your expenses and income, which could further complicate your decision-making process. A financial advisor can help you create a budget that considers your revenue, expenses, and goals. This will give you a clear picture of your finances and help you make informed decisions about where to allocate your resources.</p>
<p>A business financial advisor can also help you improve your cash flow by providing advice on managing your working capital and optimizing timely payments to your debtors and creditors. In other words, a financial advisor can help you make sound financial decisions by taking into account all the relevant factors and providing unbiased advice that is in the best interests of your company.</p>
<h3>4. Help meet your capital requirements</h3>
<p>If you need capital to grow your business, a financial advisor can help you obtain financing. They can connect you with lenders and investors who may be interested in funding your business. Further, they can help you negotiate better terms for loans and investments. Financial advisors may also help you access funds easily through a network of investors and lenders, thus benefiting your business.</p>
<h3>5. Take care of your tax planning</h3>
<p>Taxes are one of the biggest expenses for businesses that can severely dent your business and earnings if you do not plan for them properly. You also need to take care of tax formalities that arise out of investing in stocks, retirement accounts, real estate, and more.</p>
<p>A financial advisor can help you minimize your <a href="https://www.financialplanners.net/articles/how-taxes-affect-your-long-term-financial-planning-goals" target="_blank">tax liability</a> through effective tax planning. They can assist you in understanding the different tax laws and how they apply to your business and investments. They can also help you counter your tax liability by taking advantage of all relevant deductions and credits.</p>
<h3>6. Assist with retirement planning</h3>
<p>Retirement planning is often not a priority for business owners; however, they need to accept the fact that they will have to retire at some point in their lives. Further, business owners do not have employers who would take care of their retirement needs.</p>
<p>Thus, it's paramount for business owners to think and start planning for their retirement early on. A financial advisor can help create a retirement plan, after taking into account your income, expenses, and more. They can also help you choose the right retirement savings vehicles, such as 401(k)s or IRAs, to ensure you have a stable retirement to look forward to.&nbsp;</p>
<h3>7. Plan for your succession</h3>
<p>Succession planning is the process of preparing for the future of your business. It is an essential move for any business owner who wants to ensure that their business continues to thrive after they retire. A business financial advisor can help you create a succession plan to protect your business interests and ensure its continuity. At the same time, these professionals will ensure that your succession planning takes into account your goals, your family's needs, and the needs of your employees. They can also help you transfer ownership of your business to your successors in a way that minimizes taxes and maximizes profits.</p>
<h3>&nbsp;8. Help insure your business and personal estate</h3>
<p>Insurance is an important way to protect your business from risks.</p>
<p>The best financial advisor can help you choose the right insurance policies for your business, such as property insurance, liability insurance, and workers' compensation insurance and more. They can also help you get the best rates by shopping around for different insurers.</p>
<p>Also, when it comes to estate planning, it is important for any business owner who wants to protect their assets to plan meticulously, taking into account all relevant factors, right from taxes, to insurance and more. A financial advisor hee can help you develop a comprehensive estate plan that takes into account your unique financial circumstances. The advisor can help create a will, set up trusts and make charitable donations to reduce estate taxes. Further, the financial advisor can also assist when it comes to naming an executor and beneficiaries, and making funeral arrangements.</p>
<h3>9. Assist with negotiating better terms</h3>
<p>If you're planning to sell your business, a financial advisor can help you negotiate the best price with buyers. They can also help you negotiate better terms for loans and investments. That said, the best financial advisor can help you set goals for your business and create a plan to achieve them. They can also help you monitor your progress and make necessary adjustments to your plan.</p>
<h2>To conclude</h2>
<p>A financial advisor can play a vital role in the growth of your business. They can provide you guidance to make sound financial decisions and grow your company. No matter your business's stage, a financial advisor can help you grow your wealth and achieve your financial goals. With the right financial advisor, you can take your business to the next level. Remember, a financial advisor can be a valuable asset to your business. Choose one who is experienced and qualified and who you feel you can trust.</p>
<p>If you don't have a financial advisor, now is the time to find one. When choosing a financial advisor, do not forget to check their credentials and choose someone who aligns with your goals and values. Use <a href="https://www.financialplanners.net/match-advisors/search-by-zip?cta=find-planner-home-page" target="_blank"><strong>the free advisor match tool </strong></a>to match with experienced and certified business financial advisors. Give us basic details about yourself, and the match service will connect you with 1-3 professional financial fiduciaries that may be suited to help you.</p>

Due to a hectic schedule, financial planning is difficult for business owners. Read and explore how a business financial advisor can help in growing a business.

What Does the Best Business Financial Advisor Do for You?

9 Ways A Financial Advisor Can Help Your Business Grow

<p>The main goal of personal financial planning is&nbsp;to offer you a financially secure life. However, there are several ways to get there. Financial planning is complicated and requires years of experience and financial expertise to reach your goals. It is also highly dynamic, and the ever-changing stock market requires you to make alterations to your plan from time to time. While there is no fixed approach to devising a successful financial plan, certain financial elements are critical components of a plan and can need your attention and focus.&nbsp;</p>
<p>When you create a financial plan, you do so on the basis of several factors. These can include your income, risk appetite, investment budget, lifestyle, future goals, number of people financially dependent on you and their financial needs, your age and the chosen investment term, and many others.</p>
<p>These&nbsp;components of <a href="https://www.financialplanners.net/articles/8-financial-planning-steps-to-take-to-help-ensure-financial-wellbeing" target="_blank">financial planning</a><strong>&nbsp;</strong>are the foundation of your plan. Now evaluating each of these and many others can require time and effort. They can also be confusing and misleading as they tend to change with age and your personal and professional growth. This is why it helps to create a list of&nbsp;financial elements&nbsp;that are likely to affect your plan. This way, you can go back and forth quickly and compare your progress to what&rsquo;s on paper and make the necessary modifications.&nbsp;Making a list of&nbsp;key components of financial planning<strong>&nbsp;</strong>also helps you establish the proper roadmap for your future and eliminate any deviations along the way. If you need help with creating a financial plan that suits your financial needs and would enable you to achieve your financial goals, you can <a href="https://www.financialplanners.net/match-advisors/search-by-zip?cta=find-planner-home-page" target="_blank"><strong>reach out to a professional financial advisor</strong></a> who can advise you on the same.</p>
<p>Read on to know more about these critical&nbsp;financial elements<strong>.&nbsp;</strong></p>
<h2>What are the components of a financial plan?</h2>
<p><strong>Here are the main&nbsp;components of financial planning&nbsp;that you must know:</strong></p>
<h3>1. The objective of financial planning:</h3>
<p>Every person has a distinct objective for financial planning. It could be to save for retirement or put a child through college. It could also be to travel the world or buy a house. The first step in financial planning is to know the intent behind the plan. Once you see the purpose, you can pick out the right investments and savings instruments and prepare for the said objective accordingly. Try to be as precise when you set the intent for financial planning. For instance, if your financial goal is to retire securely, it is essential to understand the minute details of your retirement. For example, when do you plan to retire and where do you intend to live post-retirement? If you plan to retire in your 60s like most people, you may have a considerable amount of time ahead of you. This way, you can take a relatively relaxed approach to retirement planning. However, if&nbsp;the main goal of personal financial planning is&nbsp;early retirement for you, then you would need an aggressive investment strategy that focuses on capital appreciation in the short term. This would further dictate your risk appetite and the kind of investments you choose. In addition to this, it would also determine your budget and how frugally you must live in order to reach your goal in the shortest possible time.&nbsp;</p>
<h3>2. The appropriate level of risk:</h3>
<p>Each investor has a risk appetite, which refers to the amount of uncertainty and <a href="https://www.financialplanners.net/articles/investment-strategies-for-volatile-markets" target="_blank">market volatility</a> they can afford to take. For instance, a young investor who falls in the high-net-worth category would likely have a high-risk appetite. Such a person has a long investment term before retirement to make up for any losses. Besides, the high net worth lends the investor the ability to make bigger bets. However, someone who is approaching retirement in the next five years or is already retired would have a low-risk appetite because of the absence of enough time and an active income to overcome any unprecedented loss along the way. Risk is one of the key components of financial planning, and the sooner you understand where you stand, the better it can be. You can look at factors such as your age, income, expected or preferred retirement age, family situation, health situation, and other similar factors when assessing your risk tolerance. Typically, risk reduces as you age. For instance, you have the highest risk appetite in your 20s and 30s. However, your 50s and 60s may be a time to shift to more stable investments that can promise capital preservation over appreciation and growth. You can analyze and reanalyze your risk appetite every decade based on these factors and modify your financial plan.</p>
<h3>3. Liquidity needs and planning:</h3>
<p>Financial liquidity is the availability of cash in your hour of need. If you were to lose your job today, your financial liquidity and planning would likely determine your financial security at such a time. Liquidity is vital as it can help you tackle immediate financial needs. You may have thousands of dollars stacked away in a 401(k) or an Individual Retirement Account (IRA), but you cannot use it before the age of 59.5 years without incurring a 10% penalty. This is why it is crucial to have enough liquid savings that can help in case of an emergency, such as a health expense, home repair, creditor situation, etc. Typically, a financial advisor recommends having at least twelve to sixteen months of your annual income in a highly liquid emergency fund. This can be a fund that can be easily accessed but also one that offers growth on your money, so it does not sit idle in the face of inflation. Liquidity is one of the noteworthy&nbsp;financial elements&nbsp;that require your focus from day one.&nbsp;</p>
<h3>4. Portfolio asset allocation:</h3>
<p>Thee are different asset classes that you can invest your money in. One of the key components of financial planning<strong>&nbsp;</strong>is to have the right blend of all asset classes on your portfolio. Your asset allocation can primarily depend on your age and risk appetite. A common rule to find this out is by subtracting your age from 100. If you are 40 years old, your asset allocation in stocks can be 100 &ndash; 40 = 60%. The remaining 40% can be in bonds, cash, and other asset classes. If you are 45 years old, your asset allocation in stocks can reduce to 55%, and your other asset classes can increase by 5% up to a total of 45%. Asset allocation can also be determined based on the type of portfolio you want. Typically, there are three types of portfolios:</p>
<ol>
<li><strong>Aggressive portfolio:</strong>&nbsp;Such a portfolio is heavily concentrated on stocks with up to 65% asset allocation. The remaining assets can be bonds, cash, and others.</li>
<li><strong>Conservative portfolio:&nbsp;</strong>These portfolios focus more on bonds and fixed-income securities with up to 50% allocation in debt, 25% in equity, and the rest in cash and others.</li>
<li><strong>Moderate portfolio:&nbsp;</strong>Such a portfolio offers a balanced approach to investing with up to 50% in stocks, 30% in bonds, and 20% in cash and others.&nbsp;&nbsp;</li>
</ol>
<p>When you&nbsp;list the key components of financial planning,<strong>&nbsp;</strong>you can choose the appropriate asset allocation for your goals, age, and financial needs. Moreover, when you set an asset allocation percentage, it is also essential to revisit it from time to time. For instance, if your stock investments do well, your asset allocation of 60% in stocks may increase to 65%. This could add an unwanted risk that you may or may not be ready for. In such a case, it is essential to rebalance your portfolio and accordingly make changes to your asset allocation to match your current risk appetite.&nbsp;</p>
<h3>5. The proper investment management style:<strong><br /></strong></h3>
<p>There are different management styles in investing. You are at liberty to choose what you like and go with what works for you. However, it is essential to understand the pros and cons of each. Active investing involves a greater level of experience and knowledge of investing. If you pick active investing, you would have to search for suitable investment options, time the market yourself, diversify your investments, rebalance your portfolio and do a lot more on your own. This can be time-consuming and hassling. However, you can rely on your judgment and make decisions that you feel are right. There is no external prejudice, and you do not have to depend on anyone else but yourself.&nbsp;</p>
<p>Passive investment styles are more suitable for beginners or those who do not have the right knowledge to time the market or make decisions on their own. If you are a new investor or have a hectic schedule where keeping in tune with the fluctuations of the economy and the stock market can be challenging for you, you can adopt this style. Passive investment options include mutual funds. Mutual funds are managed by the fund manager, who makes all buying and selling decisions. In return, the mutual fund house charges you an expense ratio for management fees, administration expenses, and other similar costs. The professional manages your money, invests in different stocks, and ensures portfolio diversification. All you do is decide how much you wish to invest and when you want to redeem your money. Index funds are another passive investing option. An index fund tracks a benchmark index, such as the S&amp;P 500. The only objective of the index fund is to follow the underlying index. It does not outperform the index but merely mimics its performance. Index funds, too, can offer an excellent level of diversification. Moreover, since the fund does not exceed the index, you can sit back and relax.&nbsp;</p>
<h3>6. Costs involved in investing:</h3>
<p>Investing comes with many hidden and unhidden costs. These can include expense ratios, management fees, advisor fees, administration and marketing fees, taxes, and more. These&nbsp;components of financial planning<strong>&nbsp;</strong>cannot be avoided, but you can adopt strategies that help you lower their impact. As far as investment costs are concerned, you can look for options that cost less. For instance, check broker fees when investing in stocks. Go for a broker that charges the lowest commission, so you are able to maximize your profits. Likewise, you can opt for a financial advisor that uses a payment model that fits your budget. Financial advisors charge by the hour, by the service, or according to the investments they help you with. They could either charge you a commission for each of your investments or a percentage of your assets under management (AUM). You can select a payment model that suits you the best.&nbsp;</p>
<p>Lastly, tax planning is essential in financial planning, too. You can use tax-advantaged accounts like the IRA or the company-sponsored 401(k). These can help you save on tax. You can select a traditional or Roth option as per your present and expected future tax situation. If your tax liabilities are high, you can use strategies like tax-loss harvesting. Additionally, you can use estate planning to lower taxes. For instance, gifting or donating to charity. There are several ways to reduce tax, as long as you make this financial element an integral part of your financial plan.</p>
<h3>7. The decision to take professional assistance:&nbsp;</h3>
<p>Hiring a financial advisor can offer a lot of benefits. However, it is not mandatory to get professional assistance. The ultimate choice depends on you and how much help you need with your money and investments. If you have no understanding of the stock market and the economy, you can consult a financial advisor to get a basic idea of how to start financial planning. In this case, getting a professional on board can help you streamline your investments and focus on other&nbsp;key components of financial planning, such as debt management, budgeting, estate planning, tax planning, retirement planning, and more. A financial advisor may be able to provide you with comprehensive knowledge and understanding under these circumstances. However, if you are an experienced investor or are reluctant to get a professional on board, you can consider hiring an advisor on an hourly basis. You could also only consult on matters of concern at the moment. Not only will this lower your expenses, but it will also help you prioritize the important things.&nbsp;</p>
<p>Before you get in touch with a financial advisor, make sure you understand the relationship between an investor and advisor. Communication plays a critical role in the success of such an association. So, be prepared for open and honest communications, complete transparency, and candidness in order to benefit from your relationship.&nbsp;</p>
<h2>To summarize</h2>
<p>These financial elements can help you&nbsp;list the key components of financial planning&nbsp;and use them to create a fool-proof plan. So, try to keep an eye on them and understand their relevance in personal finance. Financial planning is an integral part of any individual&rsquo;s life, irrespective of your age, gender, financial status, or profession. The wealthy, the poor, the successful, and the freshers all need a robust financial plan that can take them to their goals with minimal digression. As long as you pay attention to these elements and accommodate them in your financial plan, you can expect to reach your goal in time and lower the unwanted stress along the way.</p>
<p>Further, if you find any roadblocks and need professional assistance, you can always entertain the idea of hiring a financial advisor. Use the <a href="https://www.financialplanners.net/match-advisors/search-by-zip?cta=find-planner-home-page" target="_blank"><strong>free advisor match service</strong></a>&nbsp;to&nbsp; engage with a professional financial advisor, who can help you create a financial plan that would allow you to attain your unique financial needs and goals. Based on your requirements, the service matches you with 1-3 advisors suited to meet your financial needs and goals.</p>

The main goal of personal financial planning is to offer you a financially secure life. Here are the 7 important factors of financial planning that you must know. 

Important Factors and Key Components of Financial Planning

7 Important Factors of Financial Planning

<p>Everyone dreams of being&nbsp;financially independent. A solid bank account, a rising investment portfolio, enough savings, and no debt, are all components that together contribute to financial independence. If you&rsquo;re wondering&nbsp;what it&rsquo;s like to be financially independent, it its state wherein you have enough money for all your present and future needs and wants. In such a situation, your debt is zero or minimal, and your income flows are sufficient to cover all your expenses and financial goals. Financial independence is the ultimate goal of all financial plans and is extremely important in life. If you are&nbsp;financially secure, you can make your own decisions. You would not rely on others for their help and can choose to live life as you please. Financial independence can also impact your mental peace, healthcare, self-respect, education, etc.</p>
<p>While people may argue that money may not be the most important thing, it does have the power to affect everything that is important, like education, healthcare, security, and more. So, irrespective of whether you wish to be the most successful person in your field of work or not, you may want to work towards being financially independent. Further, being&nbsp;financially independent&nbsp;is critical at any stage and age. Ideally, the sooner you are able to earn enough to keep you by, the better it is. So, try to earn and save more from a young age by taking up part-time jobs or freelancing. However, financial security is equally crucial at later stages of life. Retirement and old age, in particular, may warrant the highest level of monetary independence. Likewise, it is also essential for all genders to be financially independent. Regardless of how much your spouse or partner earns, it may be advised for both partners to always have individual savings for their financial security. If you need guidance on how to streamline your expenses, boost your savings rate and build a substantial retirement fund for your golden years, <a href="https://www.financialplanners.net/match-advisors/search-by-zip?cta=find-planner-home-page" target="_blank"><strong>consult with a professional financial advisor</strong></a> who can guide you on the same.</p>
<p>While a lot is said about&nbsp;achieving financial independence&nbsp;and why it is necessary, most people still struggle with being financial independent throughout their lives. If you wish to be financially secure for as long as you live, here are some things to know about&nbsp;how to become financially independent<strong>.</strong></p>
<h2>How much money do you need to be financially independent?</h2>
<p>Financial independence can be a subjective thing. It can mean different things to different people, depending on their expenses, lifestyle, goals, incomes, financial responsibilities, etc. You may get by with a smaller fortune if you are single with no debt, no children, or any other financial liability. Your savings rate could be relatively lower than someone who has four children and is a single parent, as you would need a smaller corpus to cover your planned goals as well as financial emergencies. Typically, several factors affect your needs. For instance, the state you live in and the standard of living in your city can largely influence your status. A net worth considered to be financially sufficient in Texas may fall short in California or Hawaii.&nbsp;</p>
<p>Therefore, it is vital to ascertain your goals and needs to decipher&nbsp;how much money you need to be financially independent. Typically, some theories and studies suggest that you need at least 25 times your yearly expenses to be economically independent. You could have this money in the form of virtual assets like savings and investments. Similarly, CNBC reported that the average figure for Americans to consider themselves&nbsp;financially secure&nbsp;is at least $500,000 in savings. Some financial advisors also advise the 4% rule to determine financial independence in retirement. According to the 4% rule, you need to have a retirement corpus large enough so you can withdraw 4% from it every year in retirement for as long as you live. So if your annual expenses in retirement amount to $40,000 per year, you would require at least $1 million in your savings pool to last you an average retirement of 30 years.&nbsp;&nbsp;</p>
<p>However, there is no fixed rule of thumb here, and things may differ based on your unique situation. You can go with either of these theories and rules or devise one of your own as you see fit.&nbsp;</p>
<h2>How to be financially independent</h2>
<p>Achieving financial independence&nbsp;is all about building proper habits. While some people may be fortunate to be born into wealth, others may have to work their way through. You cannot control the circumstances that you were born in, but you can incorporate simple habits and practices to get to your desired goal. Financial discipline can be one of the most important things you do to be&nbsp;financially secure, and the following tips can help you develop it.&nbsp;</p>
<h3>1. Start saving from a young age:</h3>
<p>Financial discipline from a young age can reward you like no other. If you start concentrating on building a fortune from a young age, you can take care of a significant responsibility early in life. This removes the burden of creating a considerable nest egg later. Lifestyle <a href="https://www.financialplanners.net/articles/how-financial-advisors-can-help-clients-prepare-for-future-inflation" target="_blank">inflation</a>, expanding family, increasing healthcare expenses, etc., can come in the way of your goals when you are relatively older. Your financial concerns may peak in your 40s and 50s as this is the age where your kids would be off to college or getting married, you may be finishing off the mortgage on your house, and your health may start to show signs of regression. If you leave saving to this phase of your life, you will find it overwhelming to cater to all of these needs together. However, if you start young when you are single, have no kids or health expenses, likely no home loan, and have a less rigid lifestyle, you may be able to make adjustments to your budget in favor of more savings. By the time you reach your 40s or 50s, you will have already saved enough. Moreover, if you choose to invest your money in inflation-beating instruments, your money would have compounded to generate considerable returns by now. A longer time-frame also gives your money more time to compound.</p>
<h3>2. Settle your loans and avoid debt:</h3>
<p>Debt can be the biggest enemy to financial independence. It can interfere with your savings because of high-interest rates. It can lower your credit score and make it harder to get more loans in the future when you may actually need them. Additionally, paying it off can be a big problem. A lot of people find it hard to prioritize their savings when they have debt looming. While it is good to settle your debt on priority, a continued dependency on debt can be detrimental to your savings as you tend to get entangled in the web of never-ending borrowing. Debt is not limited to loans alone. It also includes credit cards. Credit cards can be helpful and help you save money if you use them correctly, but they can also be very problematic if you get stuck in the cycle. Therefore, paying off your debt at the earliest and avoiding taking on more unless absolutely necessary is essential.</p>
<p>You can start by clearing your student debt. You can use your 20s and early 30s to settle your student loans, depending on how soon you start working and earning. Meanwhile, instead of jumping on to the next loan for a home, try to invest your money instead. If you can get by renting or sharing an apartment with friends, you can use your early years to invest your money in the stock market, a 401k or individual retirement account (IRA), mutual funds, etc. Try to invest money in instruments that can help you cover the down payment of your future home. You can also consider investing in real estate investment trusts (REITs) and not physical real estate for pure investment purposes. Once you are ready to buy a house, try to be rational about your purchase. Bigger is not always better. So, be realistic about your needs and pick something that fits your budget easily without creating a giant liability.&nbsp;</p>
<h3>3. Reduce your expenses:</h3>
<p>It is crucial to track your spending to reach your goal of being&nbsp;financially independent<strong>.&nbsp;</strong>Expenses can very quickly stall your progress. So, try to create a budget and stick to it for as long as possible. A typical budget is inclusive of your essential needs, savings, and non-essential needs. Evidently, the non-essential needs should account for the smallest portion of your salary. So, pay attention to your triggers and impulses and try to control them. For instance, if you are easily lured by food delivery apps, try to delete them from your phone, so you cook more often than ordering in. If you are a shopaholic, delete consumer goods and apparel apps to avoid the urge to shop.</p>
<p>Additionally, make a list of unnecessary subscriptions to online streaming services that you rarely watch. If you are more likely to buy coffee on your way to work, start making coffee at home. It is also essential to understand the long-term effects of your purchases. For instance, a $3 dollar coffee every day can cost you $90 every month and $1095 every year. On the other hand, a decent coffee machine can be bought for $100. So, while the $3 may seem like a small expense at the time, in reality, the $100 machine is a better buy, keeping in mind your long-term needs. Any money that you save today can account for your financial security in the future. So, try to make a list of all your expenses and analyze them to understand your patterns. Once you identify those, you will be able to make better decisions.</p>
<h3>4. Pay attention to your taxes:</h3>
<p>Taxes are a significant blow to your savings. They can render your savings useless and disrupt your <a href="https://www.financialplanners.net/articles/8-financial-planning-steps-to-take-to-help-ensure-financial-wellbeing" target="_blank">financial planning</a>. The highest tax slab in the country at present is as high as 37%. In addition to this, there are several other taxes like the estate tax, property tax, state tax, capital gains tax, etc. Your investment returns, income, inheritance, etc., can all be exposed to taxes at some point in time. If you do not effectively plan to lower your taxes or account for them in your financial plan, you will not be&nbsp;financially independent. When planning your taxes, one of the first things to do is to use the right investments and savings options. For instance, a traditional IRA would be taxed in retirement but not in the present when you make your contributions. Contrarily, a Roth IRA would not be taxed in retirement, but you would owe tax on your contribution before you retire. The right pick here would depend on your present tax liability and your future tax situation. If you foresee a high tax bracket in retirement, you may pick a Roth account. However, if you are likely to pay more tax now, you can choose a traditional account to lower your overall taxes.</p>
<p>Similarly, you can use charity or lifetime tax exemption on gifts and estates to lower estate tax. This can be an excellent way to preserve your wealth. Tax-loss harvesting is also a helpful strategy to reduce taxes. This strategy adjusts your capital gains tax against your capital losses in a year. It is also essential to plan your retirement withdrawals wisely to avoid triggering a high tax. Planning your investment redemptions can help you enjoy their actual value, so you do not lose it to tax. If you find this hard, you can always hire a professional financial advisor or tax planner to suggest tax-saving techniques that can help you.&nbsp;</p>
<h3>5. Set smart goals:</h3>
<p>Setting goals can be an effective way to be&nbsp;financially secure. Goals cut your ultimate objective into smaller milestones. They simplify the planning process and keep you motivated to reach your final destination. Goals also help you streamline the process and pick the right strategies that can help you. Moreover, time-bound goals encourage you to not lose focus and stay diligent with savings and tracking your expenses. You can add goals like retirement, buying a house, saving for a child&rsquo;s higher education, travel, etc., to your list and plan for them accordingly.</p>
<h2>To conclude</h2>
<p>Achieving financial independence&nbsp;does not necessarily have to be challenging. You can get to your target by following these simple tips. However, the essential thing is to be consistent. Following these tips for a few years and letting go will take you back to where you started. But if you focus on the bigger picture, you will be able to pull through. Moreover, these tips are not as hard to follow. They only require some discipline that can be built with practice. And, if you think you are still lacking somewhere, you always have the option to seek professional help and assistance by hiring a&nbsp;financial advisor.&nbsp;</p>
<p>Use the <a href="https://www.financialplanners.net/match-advisors/search-by-zip?cta=find-planner-home-page" target="_blank"><strong>free advisor match service</strong></a>&nbsp;to engage with a professional financial advisor who can help you become financially independent and create a significant retirement nest egg for yourself. Based on your requirements, the service matches you with 1-3 advisors suited to meet your financial needs and goals.</p>

You must be wondering what it’s like to be financially independent and never rely on others for help. Find out how to become financially independent & secure.

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