A life plan is essentially a blueprint or guidebook for your life. It establishes the goals you wish to accomplish and lays out the specific actions you will take to reach each one. Planning is the key to finding success in everything from financial security to physical well-being. In other words, planning is your path to living the life you want. Here are some critical tips to keep in mind as you begin putting your life plan together.
Prepare for the Worst
In the unfortunate event that you or your spouse dies, will your surviving family be financially secure? Although creating an estate plan will force you to confront your own mortality, it’s extremely important. This type of planning will compel you to set up a safety net for your family and decide what will happen with your assets when you die. Sit down with your spouse and go through your estate plan every five years. At this time, revisit tax laws and rework estate planning strategies that may no longer be necessary. Also, consider whether life insurance would be valuable to your family. A life insurance payout can be a blessing to family members during a time of immense grief. Use an online calculator to estimate your life insurance rates and coverage and determine if this is a viable safety net for your family.
Develop an Emergency Savings
An emergency savings fund is a practical way to provide financial protection to your family during less permanent financial problems. The purpose of this fund is for unexpected expenses and sudden income losses. For example, you can dip into this fund to pay for anything from a house repair to a large medical bill. To build up an emergency fund quickly, Money Under 30 suggests selling some of your unwanted possessions, getting a temporary second job, or making cuts in your household budget.
Set Your Financial Goals
It’s easy to overspend when you’re not working toward a specific goal. Investopedia recommends setting short-term, mid-term, and long-term financial goals to keep yourself on track. Short-term goals may include setting a budget, paying off credit cards, or building up an emergency fund. Mid-term goals, meanwhile, fall a little further down the line, such as buying a home or saving for your children’s college education. For most people, long-term goals involve saving for retirement or long-term care.
Once you’ve set your goals, come up with concrete strategies for accomplishing them. This may involve budgeting and cutting out unnecessary expenses so you can increase your credit card payments or contribute more of your monthly income to a retirement savings account. Alternatively, you may determine that you need to start a side gig to increase your income — having multiple income streams will help you work toward many financial goals at once!
Build a Realistic Budget
Budgeting is a key aspect of any life plan. A realistic budget will help you allocate your money toward your goals instead of spending it frivolously. Plus, knowing exactly where your money is going is an excellent way to relieve financial stress and feel secure about your future. Budgeting will involve taking some time out of your day to track each of your expenses, so be prepared to put in the effort. To create a budget that actually works, check out this guide from NerdWallet.
Secure Your Lasting Health
Your financial security isn’t the only thing to plan for. Plan to develop healthy lifestyle habits — like exercising and healthy eating — to enjoy greater physical health and mental well-being long into your future. This plan may include goals to stop smoking, eat more whole foods, or challenge your mind by picking up a new hobby.
When it comes to securing your family’s financial health and achieving the lifestyle you’ve always wanted, a solid plan will outline the steps you need to take to get there. Without a plan, it’s easy to overspend, put off investing, and prioritize the wrong financial goals. Plus, a good plan will help you analyze any flaws in your life strategies. Start your road map to success today so you can sleep soundly tonight!
About the author:
A special blog post on the Beginner's Guide to Life Planning for Long-Term Happiness by Brittany Fisher of financiallywell.info. Brittany worked for more than two decades as a Certified Public Accountant (CPA) and is in the process of writing her first book! In this post, Brittany shares some important financial planning tips, including building a realistic budget. Thank you Brittany for sharing your knowledge with us!