Wouldn’t it be nice to live free of financial stress and worry? What would that look like to you? Perhaps it would mean not living in debt, or having enough money saved so that you don’t have to worry in the event you lose your job.
However you view it, “financial freedom” is undoubtedly a place most of us would like to be. Unfortunately, things always get in our way to achieving this freedom; kids, emergencies, life, or our own decisions are a few of the usual suspects.
In order to reach financial freedom, you have to set out your plan; the more detailed and specific the better. In an effort to help you get to the financial “promised land,” here are ten steps to set up your own financial plan.
- Talk to your spouse about your financial goals. Many spouses have financial goals they never talk to their significant other about. In order to have financial freedom, you and your spouse need to be on the same page. Write down your financial goals and priorities separately, then compare lists and find common ground.
- Identify where you are at. Before you go anywhere, you first have to know where you are. Figure out your net worth by totaling all of your assets and subtracting your liabilities and debts. This will give you your baseline.
- Track your spending. Keep a journal of your spending, but be sure you aren’t altering your normal spending patterns. This will come in handy for the next step.
- Adjust your spending. You no doubt will find areas where you can cut spending from the previous step. Any spending you cut should go toward your savings.
- Set your life goals. You won’t know if you’ve progressed toward financial freedom if you don’t have anything to shoot for. Goals give you a target to aim at. Both you and your significant other should identify your top three goals to see where there is crossover, if any.
- Create action steps for each goal. What will it take for you to reach each of your goals. Action steps provide the roadmap to achieving your financial and life goals.
- Check into your insurance coverage. Part of being financially free is having peace of mind that you are prepared in the event of a sudden injury or death.
- Look at decreasing your taxes. This is where your tax advisor can be your best friend. It pays (literally) to know how investment returns and interest from retirement accounts are treated within the tax code.
- Write up a will. This may seem a bit morbid, but it can provide more peace of mind to have your financial wishes on paper. If you need assistance, a good attorney shouldn’t be hard to find.
- Create your final plan. It should include five parts: your current situation, your financial goals, your current net worth, your action steps, and the fifth is an Investment Policy Statement, which dictates how your investment portfolio should be invested.
Heartland Bank is able to provide a number of the products and services you need to meet your goals. Simply let us know what you are looking for, and our staff will put you in the right direction.
We look forward to speaking with you soon!
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