If you ever read financial advice on the internet, you’ll might get a lot of contradicting information. Save for retirement, but pay down your credit card bill. Pay off your student loans, but save for an emergency fund. Buying a home is a great investment, but consider your short-term financial goals, too. This all might seem like too much to think about with just one salary coming into your bank account. But the reality is that you can balance your current financial goals and your future retirement goals.
Consider your short- and long-term financial goals.
You definitely can’t reach a goal if you don’t know what it is. A good place to start is by understanding what your financial goals are, whether they are long- or short-term. They might include paying off student loan debt, paying for a wedding, buying a house, buying a car, starting a travel fund, making sure you have an emergency fund, or fully funding a retirement account. List all of your goals and a timeframe for accomplishing them.
Balance your short- and long-term financial goals.
While we financial planners can tell you what you should do, you ultimately decide what is most important. You may have the ability to buy a house, but that might not be what you want to do. Once you establish all of your goals and how important they are to you, you can prioritize and make sure you are working towards them. If you have your list, write down which goals are most important to you and what you need to save monthly to meet those goals by the deadline you’ve established.
Always save something for retirement.
Even if shorter-term goals are very important to you, you should be saving something for retirement. You may have heard that you should save 15% of your pre-tax salary for retirement. But Forbes points out how hard that can be: “To retire comfortably by following the 15% rule, you’d need to get started at age 25 if you wanted to retire by 62, or at age 35 if you wanted to retire by 65.” Because of those short-term goals like buying a home or even mid-term goals like sending kids to college, putting away 15% of your salary can seem daunting at 35, 40, or even 45.
The important thing is to be putting something into your retirement accounts. If you have an employer-backed 401(k), put as much as you can into it, especially if they offer a match. Or consider a solo 401(k) or IRA to keep your retirement funds growing.
If all of this sounds complicated and like you need assistance in determining your goals, we can help. As a financial planner, I can help you understand your current financial situation and balance short- and long-term financial goals. In my fee-for-service offerings, I can help you set goals, understand where your current investments are, and review your budget and debt. Contact me today at 301-990-9170 or [email protected] to set up an appointment and we can discuss your financial future.
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