Money For Lunch – Going Beyond Budgeting and Creating a Financial Plan for the Future

Going Beyond Budgeting and Creating a Financial Plan for the Future

March 20, 2017 10:49 AM0 commentsViews: 10

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It all started when you began working at your first job. Those first few paychecks that came in may have been spent on movie tickets and new clothes, but you eventually learned that if you wanted to save and have money for major purchases, you had to budget your earnings. In adulthood, budgeting all but becomes second nature. You may need to take money earned from several paychecks together in order to pay the rent or your mortgage. Money might need to be allocated from a specific pay period so that you are able to pay certain bills due by the beginning or the end of the month. While budgeting is vital to surviving, financial planning is the way to go when you want a strong financial future.

Distinguishing Between Short and Long Term Financial Goals

Most people can actively save enough money to put down on a new car purchase within a few months. This will probably require a tightening of the budget, reducing the number of times you are able to eat out every week. On the other hand, looking forward to driving a brand new car instead of crossing your fingers when you go to start your clunker is more than enough motivation to make budgeting worth it. Whether you are planning to save for a purchase you are going to make in a few weeks or a few years, it is a great feeling when you are able to meet your financial goals. And while budgeting almost always yields an immediate result, financial planning requires a more long term outlook.

To Save Or Invest

If you pay attention to the stock market, you might notice specific stocks going up and down in value to the point that it makes you weary of investing. On the contrary, those who have a fairly good understanding of how the stock market works would see sharp highs and lows in the market as opportunities. The difference between saving and investing is really a matter of how much risk you want to expose yourself to. If you are more conservative with your money, you may find that investing your money in a traditional bank account is more practical for you. Likewise, those who don’t have a problem with taking the occasional financial hit may be better suited for investing their funds in ETFs or even Bitcoin.

Comparing Retirement Funding Options

When you want to plan for the future, you have to consider how you are going to pay your bills after retirement. If you are traditionally employed, funding a 401K is as simple as getting a paycheck. At the same time, there are other retirement plan funding options that you can take advantage of if you understand the principles of budgeting. You can open an IRA and have enough to retire as a millionaire if you save diligently. Having enough money to live off as you grow older is important as you will want to make sure that you also have funds available to help your children or other relatives when they meet hard times. In other words, you can never start planning for retirement soon enough.

Buying A Home

Purchasing a home requires you to think, plan, research and work cooperatively with financial experts to get to your closing date. Not only do you need extra funds for a down payment and a healthy bank account balance, you have to ensure that your credit score reflects how financially responsible you are. When looking and making offers on homes that are within your budget, you also have to accept the fact that buying a house is a major financial decision. Unless you are buying a home for investment purposes, you will be physically bound to it. Although it can take time to purchase a new home, it also gives you a lot of opportunity to think about what other financial goals you want to achieve.

Having Money for All the Extras

If you work a full time job, save your money and budget consistently, you should be able to take a few days off from work periodically to treat yourself to a vacation. Of course, vacations are the only extras that you will want to treat yourself and your family to as you make your way through life. Whether it’s buying a new home entertainment system or trading in your old minivan for a luxury vehicle, every purchase that you make has to be compared against your budget to see what is truly affordable. With the assistance of a financial planner, you can talk about what kind of extras you are accustomed to and learn to spend within your means.

For you, budgeting may mean using coupons when you go grocery shopping or brewing coffee at home so that you don’t empty your bank account buying cups of coffee on the run. For each dollar that you are able to hold onto, you have the potential to grow it much larger. As soon as budgeting becomes a regular occurrence in your life, you’ll want to start expanding into financial planning for the remainder of your days.

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