We have all heard that you should have an emergency fund in place for those unexpected expenses or emergencies. It is something I believe is important if you want to simplify your personal finances. Not only do you want to plan for the unexpected you also want to plan for the expected. Yes, it sounds like common sense but you have plan for those expected events in life. By having a plan for the expected events as well as an emergency fund in place for the unexpected you will simplify your finances.
Here are some expected events that you should be planning for to simplify your finances.
Retirement – We all know we would like to retire one day. So have you started to save for your eventual retirement? Do you know how much you will need in retirement to live the lifestyle you desire? Are you contributing to a retirement plan? Do you know at what age you would like to retire and begin to make a IRA withdrawal? Planning for your eventual retirement is essential part of simplifying your personal finances. If you plan for it now its much easier to reach the goals that you set for yourself.
Death – We all know that we will eventually die one day but just not sure when. Yes it would be much easier if we knew when it would occur but at this time we can not predict our day of death. We know we will die some day so why not plan for it now even though we are not sure what day and time it will happen. To simplify this you should have a will. SEE You probably should have life insurance for those you leave behind. If you really want to be proactive, purchase a prepaid funeral plan as well as plot for your burial. You know it will happen just not sure when so why not plan for it and simplify your finances as well as your loved ones.
Car Purchase – We know your car will not last forever. You will eventually need to purchase a new one day. So why not plan for it. Here is how you can do it. You purchase a new car and decide to finance it over 3 or 5 years. Once you pay off the car loan, instead of allocating the car payment to another expense why not continue budgeting the car payment but pay yourself. This way when it is time for a new car you would have already saved the money for the new car. Now that’s planning ahead as well as simplifying your finances.
Home Purchase -We know we will purchase a home or upgrade to another home in the future since most people don’t live in one house their entire life. Why not think ahead an plan for your future home purchase.
College Education - We know its important for our children to get the most education as possible and also know its not cheap to send your child to college to further their education. You may hope for a scholarship but be proactive and plan for their future education needs.
So TAKE ACTION put a plan in place for those expected financial events in your life. Its better to plan for them than not plan for them. Planning for those events will help you simplify your finances.
What are some events in your life that you know will happen that you should be planning for?