When you imagine someone with a financial plan, what does that person look like?
It should look like you, says Brian Doran, Region Executive for New York at Popular Community Bank.
“Everyone can benefit from a financial plan. You don’t need to be at a certain income level or stage in your career to plan for your financial future,” says Doran. “The sooner you start to map out your goals, the more likely you are to benefit from it and do more with the money you have.”
Think of it this way: If you had put only $100 (that’s a little less than $2 per day for a year) in a savings account ten years ago at 1% interest, you’d have a bit over $1000 saved today with very little effort. Though you can’t go back a decade and start over, you can start right now.
Back to the basics
A financial plan can be as simple, or as complicated, as you want to make it. According to Doran, your individual financial plan may be different from other people’s, but they all start with the same step: identifying your goals.
“I encourage people to take a step back and think about what they want,” says Doran. “Do you want to save money, or earn more interest on your savings? Are you saving for a particular goal like a home, a child’s education or retirement? All of those things are factors in determining how you develop your financial plan and how you go about reaching your goal.”
Once you know what you want from your money, take a look at your current situation. That will help you create a blueprint to get from where you are to where you want to be.
Getting started is simple. “Just draw a line down the center of a piece of paper. Write down the amount of money you have coming in each month on the left and your monthly bills and financial obligations on the right,” Doran suggests.
Subtract the total amount on the right from the total amount on the left – if it’s a surplus, that’s the amount of money you have to work with. If it’s a deficit, you need to figure out how to curb your spending or bring in some more cash.
When to talk to a financial advisor
Once you know where you stand currently and what your financial goals are, it’s time to decide the best financial vehicle is for reaching them. It could be as simple as opening a savings account and routinely contributing to it. Or, you may need something a little more sophisticated to help you get your finances where you want them.
“The most important thing a financial advisor does is to listen to you in order to understand your financial goals and current situation,” says Doran. “Then we can help you decide which kind of savings or investing tool will best meet your needs.”
Whether you choose a basic savings account, a money market account, 529 college savings plan or other financial tool, the most important step in making your financial dreams a reality is to get started. “It doesn’t matter if you have a dollar to save or $10,000. Having a plan for your money can help you create a financially secure future for you and your family,” Doran says.
This article also appears on PopularTips.com.