BOSTON (CBS) – According to a Nerdwallet.com survey, 71% of Americans expressed regrets about their ability to manage money. The #1 regret- not planning early enough, followed by spending too much on non-essentials.
The financial choices in our lives are overwhelming. Once upon a time, people’s financial lives were simple. There was one kind of mortgage, you had a savings account, no credit cards and if you wanted to buy a stock you paid an 8% commission thru a broker.READ MORE: Salmonella Outbreak Includes 7 Sick People In Massachusetts
Today everyone should consider having a financial plan. The financial planning process can easily be broken down into five simple steps.
- What do you want? These are your goals.
- What have you got? This is your net worth.
- Saving and investing to get what you want
- Managing the obstacles you will encounter along the way
- Protecting the people you love and the assets you have accumulated
Let’s start with what you want, the first step. The big picture here. What do you want to be doing in 5, 10, 20 years? Where do you want to be living? What kind of job? Retired? And as grown-ups there is a dollar component to all of our goals. Remember, a goal is a dream with a deadline.
Your number one financial goal should be a comfortable retirement. But often times buying your first house, having children, school loans and credit card debt put retirement planning on the back burner.
List your goals. By writing them down you stimulate a part of the brain named the reticular activating system. This system triggers a filtering process and begins to collect information and routing it to the conscious part of your brain. Next, what’s the time horizon for each of those goals?READ MORE: Acadia National Park In Maine On Track For A Record Year
Now prioritize the list. What is the most important goal? What you have now is an outline of your financial plan. Now fill it in. How much will you need to save for each goal? Where will the money come from? Do this with each item on your list.
One more thing: To find a financial planner to help you achieve your goals and dreams in your area contact the Financial Planning Association’s (FPA) local Boston chapter.
You can hear Dee Lee’s expert financial advice on WBZ NewsRadio 1030 each weekday at 1:55 p.m. and 3:55 p.m.MORE NEWS: Bill To Scrap MCAS Test Is Subject Of Virtual Public Hearing
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