Do you have a financial plan that will help you send your kids to college, take the trips
you’ve dreamed about, and enjoy your golden years? If not, you may want to start
planning now.
Creating a financial plan may help you avoid the financial insecurity experienced by more
than 15 million Americans aged 65 and older (approximately one-third of America’s older
adults) who rely on incomes of $27,180 a year or less, according to The National Council on
Aging (NCOA). They struggle with rising healthcare bills and housing costs, poor nutrition,
lack of access to transportation, and more. Even older adults who aren’t considered
financially insecure may have difficulties meeting their monthly expenses—especially if
they suffer a major adverse life event.
Planning ahead is one of the best ways to avoid or minimize the chances of this
happening in your life. Set goals, and plan your route for achieving them. The earlier you
start, the better off you’ll be.
How to start creating your financial plan
Creating a road map of financial goals should include short-term, intermediate, and longterm
goals. While a lot of people think about what they’d like to have at different stages
of life, not many of them have an actual plan to reach those goals. Schwab’s 2021 Modern
Wealth Survey found that only 33% of Americans have taken the time to create a written
financial plan. The other 67% said they didn’t have time to develop a plan—or they didn’t
have enough money to bother making a plan.
Getting started on a financial plan doesn’t necessarily take a lot of time or money,
though. You can start with small steps, which add up and can get you closer to your goals.
Recommendations include:
Review your spending and create a budget. By looking more closely at your credit card
and bank statements, you may discover that you’re overspending in some categories that
don’t matter as much to you as they once did. Increasing your awareness of where your
money is going may inspire you to eliminate or spend less on products or services that
aren’t essential or fully utilized.
Want financial security in your
future? Start planning now
Reduce expenses where possible. Be mindful of your spending habits to see where you
can cut back. Even small changes add up. Maybe you can shave off some expenses by
packing your own lunch instead of ordering takeout, for example, or by taking steps to
reduce or eliminate overdraft fees or other banking expenses.
Make reducing debt a priority. Interest charges can add up quickly, so do what you can
to decrease what you owe
Donate or sell what you’re not using anymore. If you have antiques in your attic, an
older computer you’re not using, books you’ll never read again—or something else—
consider selling or donating them. Selling brings in extra cash, and qualified donations to
charities are tax deductible.
Create an emergency fund. If you don’t already have funds set aside for emergencies,
try to contribute a set amount every week to a savings account so you can be better
prepared. A $20-per-week contribution, for example, will add up to $1,040 per year (not
including interest).
Work with a financial professional. Saving money and cutting back expenses is a great
start, but a financial advisor can help you determine if you’re saving enough—and what
might be the best investments to help you address your financial goals.
PLANNING YOUR
Important Disclosures
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views
or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal.
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