The backbone of a successful financial life is a combination of planning for the future and budgeting in the present. Over time your plan will change as your income (hopefully) increases and the shape of your family transforms. Things are much different for newlyweds in their late-20s than the sandwich generation who are concerned with children, parents, and their own well being. No matter what your situation, in order to successfully budget and plan it is necessary to have a grip on your family’s financial priorities.
In theory this is as easy as understanding what is really important to you and your family in the long-term, then deciding on how to financially get there. Life, however, is not a straight, simple line. Instead, we all live our own lives with different jobs, different circumstances, and different complications.
At Magellan Financial we believe that the investments you have should come as a direct result of your investment plan, the Envision® Process, and your household budget. None of these are possible to complete if you don’t know have a grip on your financial priorities.
Common priorities we see among our clients include purchasing a house, paying for children’s education, saving for a comfortable retirement, taking care of parents in their old age, and getting out of unwanted debt. That doesn’t mean these are the only priorities to consider. We have seen clients who make mid-life career changes and others who hit the lottery. Take the time to understand your circumstances and clearly define your goals.
Here’s what you need to do to get started:
Start Now / Don’t Procrastinate – As that famous TV commercial said, “Just do it!” It is easy to say that you will get to this tomorrow, or next week, or next month. You can always find an excuse to put it off. Don’t. Once procrastination becomes the norm, the process of setting your financial priorities never gets started.
Think Long-term and Short-term – While there are some sacrifices that need to be made in the short-term, you need to have the big picture in mind.
Include Family Members – It may be “easier” to sit down in a room by yourself and make the decisions with no input from anyone else. And it is, until you need to get buy in from everyone involved. Collaborating on, and not dictating, family financial priorities may take compromise, but will ultimately allow you to move forward.
Choose Priorities Carefully – At the end of the day you want to feel more secure, happy, and fulfilled with your life. Prioritizing and working toward your financial goals goes a long way towards feeling good about your circumstances at every stage of life.
Be Prepared for Change – Priorities are dynamic. Life changes for both good and not-so-good reasons. When your situation changes you need to revisit your priorities and see how they may change, both for the short-term and the long-term. You may need to shift priorities for a period of time, and that’s ok. By doing this you can get back on track to fulfill your larger vision.
For more information, Magellan Financial, Inc. can be contacted at 610-437-5650 or via email.
Envision ® is a registered service mark of Wells Fargo & Company and used under license.