3 answers
Brinley
Student
Mesa, Arizona
1
Question
Asked
808 views
What is the best way to plan ahead and make long term financial decisions?
I want to know more about how to plan for the long haul and be prepared for my future financially. #financial-planning
3 answers
Nick Guglielmo
Helping Businesses Run Better
15
Answers
Washington, Washington
Updated
Nick’s Answer
Hi Brinley,
Piggybacking off what Logan said. it is all about planning. Towards that end, you should put together a simple budget of your annual expenses and and add into that budget what you are saving for a car, vacation, etc. Turn that annual budget into a monthly budget and automatically have the bank transfer those funds to a separate account which is earmarked for the car or vacation. Stick to your budget and always pay off your credit cards every month since the interest charges are so high.
One other thing, when investing through a 401k plan or any company profit sharing you should always contribute at least what the company matches in your contributions. If the company's match is 3% on a 6% contribution then you should set aside 6% so you automatically get their 3% which is a 50% return on your money right from the beginning. Your contributions are before tax contributions so it doesn't impact your after-tax take home pay as much since it is a before tax contribution.
It is a great question to ask. The key is the discipline to stick to a budget. Easier said than done.
Good luck,
Nick
financialplanning
Piggybacking off what Logan said. it is all about planning. Towards that end, you should put together a simple budget of your annual expenses and and add into that budget what you are saving for a car, vacation, etc. Turn that annual budget into a monthly budget and automatically have the bank transfer those funds to a separate account which is earmarked for the car or vacation. Stick to your budget and always pay off your credit cards every month since the interest charges are so high.
One other thing, when investing through a 401k plan or any company profit sharing you should always contribute at least what the company matches in your contributions. If the company's match is 3% on a 6% contribution then you should set aside 6% so you automatically get their 3% which is a 50% return on your money right from the beginning. Your contributions are before tax contributions so it doesn't impact your after-tax take home pay as much since it is a before tax contribution.
It is a great question to ask. The key is the discipline to stick to a budget. Easier said than done.
Good luck,
Nick
financialplanning
Katya Lev
Financial center manager
117
Answers
New York, New York
Updated
Katya’s Answer
Hi Brinley, the best way to prepare for the long term goals is to have a plan before you begin to execute.
I do recommend, that you break your goals into necessities and what are not necessities. It’s important to have an understanding around what I need and what I want. After, make a list of all bills that are must be paid on monthly basis.
The list should start with you monthly bills: monthly rent, phone bill, transportation fees (car, insurance, public transportation). Then write down how much money you spend or would like to spend monthly for food- what type of food would you like to eat whole food, take outs, cooking at home ). To save money- the best is to shop good savings in a local supermarket and prepare meals at home. We don’t realize how much money is being spend daily on Coffee,tea, lunch,. So, buy a mug and bring your drinks from home-prepare lunch at home and carry with you to school or work-you will be surprised how much saving you will have and the savings you now can put towards a dream vacation.
Money you spend on cloth, pharmacies,haircuts, ets- take a look into your closet and see if you have enough or if you need something -I recommend buy one item but a quality one and don’t buy many that you won’t wear . Also, always pick the sales days to shop-shop online sometimes better savings
When it comes to your must bills-you want to make sure you have at least 3 months of saving in your bank account. In case you loose your job, in case you need to move, in case of any emergencies-you don’t want to worry about your must bills and be stressed.
Open a saving account- try to set auto transfer at least bi weekly to have money transferred from checking to your saving-don’t have a card to it. Don’t carry more than$20 in your wallet as cash always goes to spending without realizing.
If you have a job- make sure you set up your 401k plan and begin the contributions- have it reviewed by your financial planner in the company to make sure you are benefiting.
Good luck
I do recommend, that you break your goals into necessities and what are not necessities. It’s important to have an understanding around what I need and what I want. After, make a list of all bills that are must be paid on monthly basis.
The list should start with you monthly bills: monthly rent, phone bill, transportation fees (car, insurance, public transportation). Then write down how much money you spend or would like to spend monthly for food- what type of food would you like to eat whole food, take outs, cooking at home ). To save money- the best is to shop good savings in a local supermarket and prepare meals at home. We don’t realize how much money is being spend daily on Coffee,tea, lunch,. So, buy a mug and bring your drinks from home-prepare lunch at home and carry with you to school or work-you will be surprised how much saving you will have and the savings you now can put towards a dream vacation.
Money you spend on cloth, pharmacies,haircuts, ets- take a look into your closet and see if you have enough or if you need something -I recommend buy one item but a quality one and don’t buy many that you won’t wear . Also, always pick the sales days to shop-shop online sometimes better savings
When it comes to your must bills-you want to make sure you have at least 3 months of saving in your bank account. In case you loose your job, in case you need to move, in case of any emergencies-you don’t want to worry about your must bills and be stressed.
Open a saving account- try to set auto transfer at least bi weekly to have money transferred from checking to your saving-don’t have a card to it. Don’t carry more than$20 in your wallet as cash always goes to spending without realizing.
If you have a job- make sure you set up your 401k plan and begin the contributions- have it reviewed by your financial planner in the company to make sure you are benefiting.
Good luck
Logan Mitchell
Senior Manager - National Quality Organization - SEC Services at PwC
4
Answers
Florham Park, New Jersey
Updated
Logan’s Answer
Hi Brinley -
Thanks for the question. I think the best way to plan ahead is to first determine your goals:
Do you want to own a house?
Do you want to raise a family?
Do you want to have the freedom to travel extensively?
When do you want to retire?
....and many others. Only once you've determined your goals can you then develop a plan focused on achieving the desired outcomes. Once you have your goals I would research the associated financial costs of achieving the goal and how that fits in with your projected income and living expenses. Only then will you realize how much you need to save overtime to make your goal a reality.
Logan
Thanks for the question. I think the best way to plan ahead is to first determine your goals:
Do you want to own a house?
Do you want to raise a family?
Do you want to have the freedom to travel extensively?
When do you want to retire?
....and many others. Only once you've determined your goals can you then develop a plan focused on achieving the desired outcomes. Once you have your goals I would research the associated financial costs of achieving the goal and how that fits in with your projected income and living expenses. Only then will you realize how much you need to save overtime to make your goal a reality.
Logan
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