EBONY HAZELEGER: Going the distance in financial planning

The importance of setting and working toward your financial goals means putting your goals into practice. As the old saying goes, “If you have failed to plan, then you are planning to fail.” If there’s an economic downturn, if circumstances change, it could affect your financial health in the long run. It’s important to stick to the process and to establish good habits right away. So instead of groaning over your financial debt and allowing your mind to jump to the wrong conclusions, the first step is to take action in order to make you feel more hopeful about your situation. The three top goals to keep in mind are retirement, cash reserves, and work with a financial advisor.

Your first savings goal is to build a cash reserve equal to at least three months’ worth of living expenses to be used in case of emergencies or other unexpected expenses. We can always be certain that unpleasant surprises do happen in life such as being laid off, illness, starting a family, and other unforeseen events. So don’t hesitate to start right away. Tax-free investments are a great way to give your savings a boost. Plus, with compound interest, it gives your cash accumulation more value.

Once you have gotten your cash reserve on track, the next step is to start saving for retirement or to continue to build your retirement savings. Time is your biggest ally in setting up for your retirement. In the book “Get A Financial Life” by Beth Kobliner, the author puts into perspective why time gives you the biggest return on your investments. Here’s an example from her book:

“Suppose you set aside $1,000 a year from age 25 to age 64 in a retirement account that earns 5 percent a year (historically, stocks return about 8 percent, but we’ll be conservative). That’s $39,000 total you invest. By the time you turn 65, you’ll have $126,840. If you don’t get started with saving until you’re 35, you’ll have only $69,760. Starting just 10 years earlier would have doubled your total. Yes, doubled.”

Finally, always seek help from a financial advisor. The right financial advisor will not only help you identify your long-term and short-term financial goals, they will also help you choose the safest investments that are best suited for your goals. For more help in building your retirement goals, cash reserves and safe investment alternatives, give my office a call today.

Ebony Hazeleger is the owner and creator of Home Plan Advisors, which specializes in helping families become debt-free, maximize savings for college expenses and retirement, and establish emergency funds while minimizing risk and income taxes based on her smart money management system. For more information, call (866) 248-1871 or visit www.homeplanadvisors.com.