Will I have enough money? Plan what you need

What keeps you up at night series.

Finances keep many people up at night. As an advisor, the most common fear I hear expressed is – will I have enough money? Will I have enough money for retirement? Will I have enough money for my children’s college education? How do I know if I am saving enough? What if I am doing all of this work on my finances and it is not enough?

The journey towards financial goal success can be intimidating; however, just like anything else, a plan can help you define where you need to go and how to get there. I have frequently spoken about the 50/20/30 budget approach which provides a guideline about how to divide your paycheck. At least 20 percent is used to build for the future. Just saving twenty percent of your net income is not enough. You need to formulate a plan to make best use of your saving efforts.

According to Wikipedia, a financial plan is a “comprehensive evaluation of an individual’s current pay and future financial state by using current known variables to predict future income, asset values and withdrawal plans.”  You must know where you are today and where you want to be tomorrow. After creating a bucket list of goals, the roadmap for the journey is devised based on pairing up the present and the future. Look at 1 year, 5 year, 10 year, etc personal goals and develop the direction to avoid running out of money before they are achieved. Goals should be built around insurance planning, tax planning, investment planning, retirement planning, and wills and estate planning. Reviewed and adjusted on a regular basis, this approach to future target achievement should help provide financial confidence.

My many years in Financial Advising has taught me how frequently people lose sleep over money concerns. Running out of money for any financial goals is always a fear. If a plan is formulated, a client can create a path and review their proximity to meeting their goals regularly.