5 answers
daniel
Student
Miami, Florida
1
Question
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what is the best financial planning modes?
finance tips
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5 answers
Doc Frick
Career Coach and Mentor
1616
Answers
California, CA
Updated
Doc’s Answer
Even if your ability to invest is limited Daniel, begin your financial future by making small contributions to investment accounts can help you use your earned money to generate more income. Find out if your employer offers 401(k) matching, which essentially serves as free money. Consider opening a retirement account or other investment account. Some of these changes will be easier than others, but if you stay committed, you’ll end up with some great money management skills that will serve you throughout your life—and in the meantime, you’ll have more money in your pocket.
TIP 1: DEBT FREE — Remember that a credit card may seem like a saviour at the end of the month, but in reality it is actually eating up your savings. If you have any unpaid credit card bills, please pay them beforehand. Also if you have any loans or own any personal debts, do get rid of all of them. Because if you want to build a decent corpus through effective financial planning, you cannot afford to have any debts.
TIP 2: SAVE IT & FORGET IT — Once you’ve set your monthly savings goal, make it untouchable. It’s as simple as setting up automated transactions on payday. You won’t be as tempted to use that money when you directly transfer that portion of your income into savings or retirement accounts.
TIP 3: DIVERSIFICATION — Portfolio diversification is one of the most essential financial planning steps. It is important to avoid investing all your money in a single asset class, market cap, spread your investments across different types of portfolios, such as Stocks, CDs, IRAs etc. Remember diversification, if you invest in stocks, do not concentrate all your funds in one sector or company.
TIP 4: MAKING IT BIG –Inevitably, as your income increases over time, it may be tempting to increase your spending as well. When your income increases, consider increasing your savings first rather than increasing your spending to match your income.
TIP 5: EMERGENCY FUND – Experts recommend that having at least 3-6 months of living expenses in their emergency fund. Being financially prepared under times of distress can give you the confidence to tackle any circumstances and also help safeguard your financial well-being.
TIP 1: DEBT FREE — Remember that a credit card may seem like a saviour at the end of the month, but in reality it is actually eating up your savings. If you have any unpaid credit card bills, please pay them beforehand. Also if you have any loans or own any personal debts, do get rid of all of them. Because if you want to build a decent corpus through effective financial planning, you cannot afford to have any debts.
TIP 2: SAVE IT & FORGET IT — Once you’ve set your monthly savings goal, make it untouchable. It’s as simple as setting up automated transactions on payday. You won’t be as tempted to use that money when you directly transfer that portion of your income into savings or retirement accounts.
TIP 3: DIVERSIFICATION — Portfolio diversification is one of the most essential financial planning steps. It is important to avoid investing all your money in a single asset class, market cap, spread your investments across different types of portfolios, such as Stocks, CDs, IRAs etc. Remember diversification, if you invest in stocks, do not concentrate all your funds in one sector or company.
TIP 4: MAKING IT BIG –Inevitably, as your income increases over time, it may be tempting to increase your spending as well. When your income increases, consider increasing your savings first rather than increasing your spending to match your income.
TIP 5: EMERGENCY FUND – Experts recommend that having at least 3-6 months of living expenses in their emergency fund. Being financially prepared under times of distress can give you the confidence to tackle any circumstances and also help safeguard your financial well-being.
Joanna Rose Mañaol, CPA, CISA
IT Auditor
200
Answers
San Jose, California
Updated
Joanna Rose’s Answer
Hello Daniel,
The best financial planning models typically involve a combination of budgeting, saving, investing, and protecting your assets. A robust model starts with setting clear financial goals and creating a detailed budget to manage income and expenses effectively. Investing wisely based on risk tolerance and time horizon is crucial, incorporating a mix of assets to optimize returns while managing risk. Additionally, ensure to include insurance and an emergency fund in your plan to safeguard against unforeseen financial setbacks, maintaining financial stability over the long term.
The best financial planning models typically involve a combination of budgeting, saving, investing, and protecting your assets. A robust model starts with setting clear financial goals and creating a detailed budget to manage income and expenses effectively. Investing wisely based on risk tolerance and time horizon is crucial, incorporating a mix of assets to optimize returns while managing risk. Additionally, ensure to include insurance and an emergency fund in your plan to safeguard against unforeseen financial setbacks, maintaining financial stability over the long term.
Brian Foley
Accounting
3
Answers
Boston, Massachusetts
Updated
Brian’s Answer
Start with saving an emergency fund for life's unexpected expenses.
Once you have an emergency fund, invest early and as much as possible to see the magic of compounding returns. Make sure to not overextend yourself though as you want to be able to commit to your investment for a long time period to not be negatively impacted by short term changes in the financial markets.
Keep your investments simple - consider investing in ETFs which can get you exposure to multiple high quality companies which reduces risk. Automate your investing such that you don't have to think about it and take the emotional aspect out of investing. Remember that you have many years to invest to growth wealth. Remember the phrase "always be buying". Said another way, don't get spooked, when there may be downturns in the stock market. Downturns in the stock market can be a good opportunity to add to your investments.
I like listening to the MoneyGuys podcast who provide interesting tips and how to keep financial planning simple.
Once you have an emergency fund, invest early and as much as possible to see the magic of compounding returns. Make sure to not overextend yourself though as you want to be able to commit to your investment for a long time period to not be negatively impacted by short term changes in the financial markets.
Keep your investments simple - consider investing in ETFs which can get you exposure to multiple high quality companies which reduces risk. Automate your investing such that you don't have to think about it and take the emotional aspect out of investing. Remember that you have many years to invest to growth wealth. Remember the phrase "always be buying". Said another way, don't get spooked, when there may be downturns in the stock market. Downturns in the stock market can be a good opportunity to add to your investments.
I like listening to the MoneyGuys podcast who provide interesting tips and how to keep financial planning simple.
Rory Lall
Administrative Assistant
57
Answers
Valley Stream, New York
Updated
Rory’s Answer
There's a wealth of resources available to help you navigate your financial journey successfully. Let's dive into some of the main tools you can leverage:
Budgeting Software and Apps:
These handy resources make it easy to monitor and sort your expenditures. They can link to your various financial accounts, such as checking, savings, credit cards, loans, and investments, to automatically sort your expenses. By setting spending caps for each category, you can form a budget. Popular options include Mint, YNAB (You Need A Budget), and PocketGuard.
Savings Tools:
If you're looking to bolster your emergency fund or save for a specific goal, like a new car, savings apps can be a great help. These services can effortlessly transfer money into your savings account or a chosen account. Check out options like Digit or Qapital.
Investment Software and Apps:
For long-term financial aspirations, like retirement, investment tools can assist you in building a portfolio and making informed investment choices. Popular apps include Robinhood, Acorns, and Wealthfront.
Tax Preparation Software:
Tax software makes the tax preparation and filing process a breeze. These tools guide you through deductions and ensure you're in line with tax regulations. Services like TurboTax or H&R Block are worth considering.
Remember, the most effective financial planning tool will depend on your specific goals, needs, and preferences. Take the time to explore various tools and find the ones that suit your financial health goals. Also, here are some key financial planning considerations to bear in mind:
Cover Your Basics First: Make sure you have an emergency fund, insurance coverage, and a basic budget set up.
Plan from a Net Perspective: Take into account your after-tax income and expenses when forming a financial plan.
Work on a Solid and Realistic Budget: Be truthful about your spending habits and establish reasonable limits.
Be Conservative with Inflation Rate Assumptions: When estimating future expenses, use a conservative inflation rate.
Start with the End in Mind: Identify your long-term financial objectives and work backward to form a plan.
Feel empowered to explore these options and customize your financial planning approach to fit your unique circumstances!
Budgeting Software and Apps:
These handy resources make it easy to monitor and sort your expenditures. They can link to your various financial accounts, such as checking, savings, credit cards, loans, and investments, to automatically sort your expenses. By setting spending caps for each category, you can form a budget. Popular options include Mint, YNAB (You Need A Budget), and PocketGuard.
Savings Tools:
If you're looking to bolster your emergency fund or save for a specific goal, like a new car, savings apps can be a great help. These services can effortlessly transfer money into your savings account or a chosen account. Check out options like Digit or Qapital.
Investment Software and Apps:
For long-term financial aspirations, like retirement, investment tools can assist you in building a portfolio and making informed investment choices. Popular apps include Robinhood, Acorns, and Wealthfront.
Tax Preparation Software:
Tax software makes the tax preparation and filing process a breeze. These tools guide you through deductions and ensure you're in line with tax regulations. Services like TurboTax or H&R Block are worth considering.
Remember, the most effective financial planning tool will depend on your specific goals, needs, and preferences. Take the time to explore various tools and find the ones that suit your financial health goals. Also, here are some key financial planning considerations to bear in mind:
Cover Your Basics First: Make sure you have an emergency fund, insurance coverage, and a basic budget set up.
Plan from a Net Perspective: Take into account your after-tax income and expenses when forming a financial plan.
Work on a Solid and Realistic Budget: Be truthful about your spending habits and establish reasonable limits.
Be Conservative with Inflation Rate Assumptions: When estimating future expenses, use a conservative inflation rate.
Start with the End in Mind: Identify your long-term financial objectives and work backward to form a plan.
Feel empowered to explore these options and customize your financial planning approach to fit your unique circumstances!
Katherine Avery
Run a music studio and teach private music lessons; teach college-level religion classes
350
Answers
Spanish Fork, Utah
Updated
Katherine’s Answer
If you haven't heard of or done Dave Ramsey's Baby Steps, start there. Many finance people will say the same things just in different words or a different order. You may not stick with everything forever that the Baby Steps says, but get started using them and you'll have the leeway to then make your own decisions.