It’s never too early to start preparing for your retirement. Personal financial planning is the first step to help you become financially independent. Read on to find out tips about how to plan for your future.

What is Financial Planning?

Personal financial planning is when a single person takes action to manage their personal finances. The process of planning your finances will be unique, since it has to do with your own personal goals. Proper planning will go on for a long period of time, so don’t let it discourage you if you’re not reaching all your goals right away.

1.      Write Down your Financial Goals

Start by writing all your goals down, you’re more likely to achieve them this way. Having your goals on paper allows you to visually see what you need to accomplish and helps you to prioritize your goals.

2.      Pay Off Debt

It will be difficult to start financial planning if you’re in a lot of debt. The best way to tackle this is to list and categorize what you currently owe. Identify which debts carry the most interest and pay those off first, to ensure you pay off larger amounts with higher interest costs.

3.      Create a Retirement Plan

Proper financial planning helps you effectively manage your money throughout the years, to guarantee you live the retirement you deserve. Make a list of what your dream retirement includes and how much money you would need saved to achieve it.

4.      Avoid Unnecessary Expenses

Incorporate the 50/30/20 budgeting principle when breaking down your expenses. The rule states that 50 percent of your income should go to living essentials, 30 percent towards lifestyle expenses, and 20 percent into savings. This principle can help you manage your money accordingly, so you can avoid overspending.

5.      Plan for Tax Season

Taxes are always a guarantee, so make sure you plan for them accordingly every year. It’s recommended that you sit down with a tax accountant or financial advisor to help plan for your projected yearly taxes.

6.      Check your Credit Report

Stay on top of your credit report and check regularly for any inconsistencies. If you see any errors on your credit score, reach out to the credit bureaus to report them. Improving your credit score is extremely important for you in the long run. A good credit score influences the loans you get and the rates you pay.

Financial planning can be overwhelming at first, especially when you’re not sure where to start. If you need help getting ahead, contact the financial experts at Satty, Levine & Ciacco, CPAs, P.C. We can guide you through the process. Visit our website today to get started!