Five Simple Steps to Boost Your Financial Confidence
Many of us push long-term financial planning to the back burner because of overwhelming short-term priorities like child or elder care, our careers, and community commitments. However, one of the best moves you can make right now is to become more familiar with basic financial planning. No matter how complex your day-to-day life, today is the day to begin prioritizing your goals and increasing your financial confidence.
- Get organized. Prepare a list of your income, expenses, assets, and liabilities. In addition, gather all information you have about your bank accounts, credit cards, mortgage or rent payments, insurance policies, etc., and create folders for each of them. This one step will help you stay organized and set goals for the future.
- Set goals and plans to reach those goals. Make a list of your goals, such as paying down debt, saving for your children's college education, or saving for retirement. Then, set a plan to start reaching those goals. For example, set a budget, a payment plan to pay down debt, or a 529 college savings plan to save for your child’s education, or enroll in your company’s 401(k).
- Plan for the unexpected. Many of us make the mistake of not planning for the unexpected, which, in turn, leaves a burden on our families. If you are caring for others, either your parents and/or your children, you should adequately protect yourself with life and/or disability insurance. The death benefit from a life insurance policy can help protect your family should something happen to you. Disability insurance can help in the event you become disabled and need someone to care for you. A financial professional can help you determine adequate coverage. In addition, setting up a will or an estate plan now will help ensure that your wishes are honored later. An attorney can help you set up a will.
- Save for retirement. Contributing to an employer-sponsored 401(k) or an individual retirement account (IRA) is one of the easiest, smartest things you can do to help prepare for retirement—even during times of financial difficulty. If you have access to a 401(k) plan, contribute the maximum amount allowed by your employer or, at the very least, enough to take advantage of any matching contributions. If you don’t have access to a 401(k), consider starting an IRA.
- Meet with a financial professional. What you don't know can hurt you. There’s a world of financial products beyond bank and credit card accounts that can help you meet your insurance, investment, and savings goals. A financial professional can help you understand the risks and rewards of various financial products, including life and disability insurance, 529 college savings plans, individual retirement accounts, annuities, and mutual funds. He or she can also help ensure that your financial plan is diversified so that you can feel like you have the right balance as economic situations change. Find a financial professional today.
The Prudential Insurance Company of America, Newark, NJ