Planning for Your Financial Future

When most of us think of investing, we immediately think of investing for retirement. While your financial plan should include investing for retirement, there are other pieces of the puzzle to consider. Establishing a budget, investing early and regularly, starting an estate plan, and saving for college should also be included in a complete financial plan.

Establish a budget
Establishing a budget is a great first step for a sound financial plan. A budget is a planning tool used to record all of your income and expenses. By writing down how much money you earn and spend each month, you can see where your money is going and prioritize your expenses and needs. Any money left over can be used for saving and investing. Even a small amount of money invested regularly can help.

Invest early and regularly, even small amounts
The best reason to start a regular investment program early is to give the money you set aside as much time as possible to grow through compounding. If you haven't started investing yet, it's best to start now and get in the habit. Just remember that the amounts you invest do not have to be large, especially if the money is taken directly out of each paycheck. You will be surprised how you don't miss money you don't see. If you're already investing every month, look for ways to contribute more through bonuses and monetary gifts.

Estate planning
Estate planning is a strategic plan that coordinates the distribution of everything you own before and after you die. You may think you don't have enough money to worry about an estate plan, but such a plan plays a critical role in everyone's financial plan.

A will is a good start, but by no means is it a complete plan. A will can help ensure that assets -- your home, property, savings, and investments -- are passed on according to your wishes. If you die without a will, your state law decides the distribution of your estate. Proper estate planning also may include powers of attorney, trusts and living wills, which may address certain needs while you're still alive.

College tuition planning
Preparing for your children's or grandchildren's college education is important, especially when tuition costs are rising every year. Your plan might include investing in the Coverdell Education Savings Account, which allows tax-free withdrawals for qualified higher education expenses such as room, board and tuition. You might also want to look into prepaid tuition plans or a College Savings Plan (529 Plan).

When developing a financial plan, consider all the pieces to the puzzle, not just retirement and you may be prepared to meet all the expenses in your financial notebook.

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