Solid Tips for the Life Planning Novice

Recently I received an email offering an article that might be helpful to our residents, especially the younger ones. Jackie is a blogger who does not live in Arizona but her ideas could be useful in your financial planning. Here is her email:

Hi,

Recently, my husband’s mom passed away, and as we went through the probate process, I began to feel like my husband and I hadn’t done enough to plan for the future.

Sure, we have a retirement plan and a will. But I worried that we hadn’t done enough to ensure our child on the autism spectrum would have a caregiver into adulthood. I realized I wasn’t clear on whether our home could be passed on to our children if something were to happen to us. And these concerns spun into others.

So, I did tons of research, and with every new thing I learned, I began to feel better. I’d love to share that knowledge with your subscribers. I could write a guest article for you with a novice’s approach to life planning–what contingencies to plan for when it comes to your children’s futures, what financial considerations to make and where you can learn more about them, and so on.

It’s a tough subject to tackle, but I hope hearing about it from someone who until just recently felt equally overwhelmed will be helpful to those who just don’t know quite where to start.

Please let me know what you think. If you’re interested in a guest article, I can get it over to you right away.

All the best,
Jackie Waters
jackie@hyper-tidy.com
Hyper-tidy.com

Here is her article: 

holding-handsPlanning for your future can seem daunting – especially when you’re young. It’s important, however, to start as early as possible so you can streamline your goals and start working immediately to achieve them.

– First, make a life plan 

How can you possibly know how to start saving for your future if you don’t know what you want? Any beginning life planner must first sketch out a solid life plan. Think about what you want to happen in the next year, next 5 years, next 10 years and so on. Think about all aspects of your life and then develop a plan for how you will satisfy all of your wants and needs. It helps to actually map this out. Sometimes preparing a visual representation of where you want to be at every stage of your life (even how you will be spending time with your grandkids) can help you figure out what you really want.

– Set up a proper budget 

You can’t begin to save for your future unless you first prioritize your spending. Track your day-to-day expenses, chart your income, and figure out how much you’re spending on fixed costs (bills, utilities, and other necessities) and discretionary costs (all the fun stuff).

– Start saving as soon as you can 

If you can, you should allocate at least 20% of your income to savings. The first thing you should do when saving is create an emergency fund – a liquid account that can be used to pay for life’s many contingencies. You never know when you’ll need to pay for a car or home repair, a new child, or life after a job loss. That emergency fund should be able to support you for at least three months – more if you have children. This prevents you from having to use credit cards or loans to pay for unexpected events. You can’t pay off debt if you keep racking it up.

– If you have children, make special preparations 

Kids are great, but they add an extra level of stress when it comes to life planning. You should consider life and/or disability insurance, as well as plan for you kids’ future expenses. Once you pay down your debts and create an emergency fund, you can start to really invest. Look into 529 plans, which are becoming one of the most popular ways to invest money for future college expenses.

– Start funding for your own retirement as early as you can. 

Whenever you can start investing in retirement, do it. It truly is never too early to start. Of course debt and emergency funds are the most important use of savings, but once those are in check there’s nothing more important that saving for retirement.

“When you get your first full-time job, consider setting up a 401(k) plan. This will allow you to put about 15% of your gross income into the plan. The money will come out of your check pretax, and you won’t have to pay capital gains year to year, but rather upon distribution when you are 59.5. Also, consider funding a Roth IRA. With a Roth IRA you take after tax money and put it into an account that can be invested in a mutual fund, stocks or bonds. The advantages to this type of account are you don’t have to lay out any money on capital gains each year, nor do you have to pay tax upon distribution,” says the Investopedia.

Before you can start investing in more exotic life goals, you have to cover the basics. Remember to take time to set up a life plan, so your savings and investments have a true direction.

Photo Credit: Pexels.com

Please let me know whether or not you found the article interesting/useful. Would you want to see more articles like this?

Ken  blog@kmtaylor.com

Author: Ken Taylor

I am a relatively recent Armory Park resident (2/16) along with my wife, Donna and our little dog Lulu. In our 7+ decades, Donna and I lived over 30 years in Anchorage, Alaska before moving to Arizona. We have been Arizona residents for 16 years before coming here including 12 in Green Valley and four in west Tucson. We love the neighborhood for its history, walkability and interesting residents. Lulu insists on walking every day so you may see us following her around and picking up trash to keep our neighborhood presentable.

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