Plan for your financial future

If you’re driving to a place you’ve never been, you probably have a road map – or, more likely, your smartphone’s handy GPS – by your side. Along the way, you might check in from time to time, verifying an exit number or a street name so you don’t get lost along the way.

Just like you need a road map to get you to a physical destination, you also need one to reach  financial success. Paying off debt. A Caribbean cruise. That college fund for the kids. We all have life goals that require a closer look at our spending and finances.

The first steps toward making those dreams a reality:

1. Writing them down
2. Creating a spending plan
3.  Researching ways to make your money grow.

Once you’ve set the course, you’ll need to regularly assess your progress to make sure you stay on track. In fact, financial experts advise that we all evaluate our financial health at least every six months to ensure we’re avoiding regular wrong turns into a high-priced coffee shop, for instance, where the price tag for a latte can easily eat into a carefully crafted budget over time.

As you assess your budget and consider your progress, here are three questions to ask yourself so you can stay the course:

Am I saving enough?

First, verify that your emergency fund is full. Experts advise that you put away about two months of your salary to cover any sudden expenses in case of a job layoff, a natural disaster or any other unexpected emergency.

Then, start looking at your other priorities. Maybe you would like to pay off $3,000 in debt in the next two years. Or, maybe the dream is to take a $3,000 cruise in two years. That means you’ll need to set aside $1,500 each year, or $125 per month, to pay off the debt or pay cash for that cruise.

Are you meeting your savings goal? Could you save more? Your financial future depends on it.

Financial experts recommend saving at least 10 percent of your annual income to invest in your long-term goals. One savings tip, according to Money.gov, is to “pay yourself first.” Each time you get your paycheck, set up with your bank to automatically transfer a specific amount from your check to a savings account.

How am I spending my money?

Have you cut out all of your unneeded expenses? Or, are you still buying lunch out every day instead of packing your own and holding on to that gym membership you never use?

Take a hard, critical look at exactly how you’re spending your money. Ask yourself: What makes me happier – daily lunches out or the relief that comes from paying off debt?

How close am I to reaching my goals?

Now that you’ve looked at how much you’re saving and spending, figure out how close you are to achieving your goals. Are you running behind? Will you get there on time? Or, are you ahead of schedule?

There’s a funny thing about tracking your savings, according to Money.gov. People who save actually end up saving more because they’re thinking about it. In fact, you can download smartphone apps to keep you from indulging in impulse buys.

Once you’ve evaluated  where you are, congratulate yourself for your good work or make any necessary changes to get you back on the right course. With a smart plan, some hard work and regular assessments, those dreams can eventually turn into accomplishments.

The team at CESI is committed to helping you make wise financial decisions and to helping you understand how to get out, and stay out of debt.  For a free debt analysis, contact us and find out how we can help.