Are You on Track to Meet Your Financial Goals?
Published: October 2019
Author: Bank of England Mortgage Staff
October is Financial Planning Month, which serves as a useful, annual checkpoint to make sure you are on track to meet your long-term financial goals. You can use this time to learn about all of your options and prioritize your goals going into the New Year.
Make a Budget
In order to truly manage your money, you should have a working budget for each month. A budget allows you to give each dollar you make a purpose. It puts you in control of your money. It lets you track your spending and helps to measure whether or not you are meeting your financial goals.
Although a budget may seem like a lot of work or too basic when you think about creating a long-term financial plan, it is the key to real, lasting financial success.
Start an Emergency Fund
Once you are out of debt you should build an emergency fund of six months’ worth of expenses that you leave in the bank. If you feel your income is stable or have access to home equity or other forms of credit to use if needed, then you may be able to plan for the lower figure. If your credit is near its limit and your income outlook is less secure, you might want to save more.
Save for the Future
NOW is the time when you should start saving for retirement. Many financial advisers recommend putting 15 percent of your gross income into retirement each year. However, if you have specific retirement goals you should increase this amount.
In addition to saving for retirement, you should begin to plan and save for future expenses like your child’s education or a down payment on a home.
Assess Your Income Tax Picture
You may be able to reduce your tax burden – sometimes significantly – by making strategic tax decisions before the end of the year. Your tax professional can alert you to any tax planning strategies that might make sense for your situation.
Review Critical Documents
Life tends to change without warning. Now is the time you should review your legal documents and beneficiary designations every year. This should include combing through your wills, trusts, retirement plan documents and life insurance policies to make sure they’re up-to-date.