Financial planning is something that we all have to do — even if we do occasionally have to be dragged to the calculator, kicking and screaming. There are so many better ways we could be spending our time, but taking care of the bills and financial management have to be afforded some time in your schedule.
For the most part, financial management tends to focus on the here and now, the moments right in front of you. It’s about ensuring you have enough money in your account to pay the next set of direct debits, rather than looking any further afield. This is especially true if you’re young; any deeper financial management seems like something you should do eventually, but you’re not going to trouble yourself with it at this point in your life.
The truth is, the future is going to come around faster than you think. If you want to secure your financial status and way of life for the long term, then you have to start thinking about the future — today. If you’ve never done much in terms of planning for not just the near but the distant future, then here are three questions you absolutely need to be able to answer.
How Will You Pay For Your Retirement?
People are generally terrible at saving for retirement, especially if they’re self-employed. While retirement might seem a long way in the future to you, the earlier the start, the better off you’re going to be in your golden years.
Figuring out how much you need to live on is a personal matter that can’t be dictated to you, but think about the kind of lifestyle you would like to enjoy in your retirement. When you have got a figure in mind, plug it into a pension calculator to see how you’re going to be able to get to that figure. The sooner you start contributing to that, the better.
How Is Your Credit Score?
Your credit score has a huge influence on your financial situation. Not only can it impact your ability to borrow, but it’s also the defining factor in the interest rates that you might be offered on any borrowing. There are all sorts of ways to check your credit score — for free — and ensure it has the right information held on you; credit agencies can get it wrong, so you need to check. If you’re paying too much to borrow, then this is going to have a knock-on effect on your entire financial future. This step is especially important if you have filed for bankruptcy in the past or have experienced any adverse credit impacts, such as defaults.
Where Is Your Career Going?
In almost all jobs, there is another rung that you can move to that can advance your career. Are you heading in the right direction for that continual advancement? Being comfortable in a job can be great, but it can also mean you’re not making the most of your earning potential. Explore your options and see if there is another step you can take to help with feathering the nest for retirement.
Financial planning is never going to be fun, but if you run through and find answers to the above questions, then you’re on solid ground. Here’s to the future!