Living one day at a time and staying in the present is essential for our health. But thinking about the future from time to time is essential to have quality of life!
And to adjust your financial life, the ideal is to do long-term planning, targeting your goals and retirement .
Do you know how to organize your finances by projecting a long period of time? In this article, we’ll explain everything you need to know to start your long-term financial planning . Good reading!
What is long-term planning?
You can do different types of plans. The menu of the week, a birthday party or a trip abroad.
One thing that all this has in common is organization, to have long-term planning, it is necessary: organization, discipline and priorities . Of course there are other points to be developed, but basically that’s what you need to have financial organization .
And this planning can be short, medium and long term. But in the specific case of this article, let’s focus on a longer period of time. That is, those goals over 10 years old .
It could be retirement (in this case, the term may depend on your age), building equity, investing in your children’s future, etc.
Why is long-term planning important?
Everyone has dreams to be fulfilled, but some need more time to happen. Long-term planning and discipline will help you get there!
Saving money for retirement, for example, takes time. Building your wealth to live comfortably is not something that happens overnight. And it is through planning that you will achieve financial success .
How to do long-term planning?
Anyone who got this far must be wondering: what can I do to have good long-term planning?
Well, that’s exactly what we’re going to talk about from now on. One of the things you need to do is have a monthly budget. Know all your expenses and income in a spreadsheet and direct a value for each expense.
So you will have a value for essential expenses (water, electricity, gas) and another part for non-essential expenses (cinema, restaurant, tours). Do not forget to also separate an amount to save and invest .
Check out more tips on how to have long-term planning!
List your dreams and goals
Stop and think, what do you want for your future? This is an item that will guide others. Everything you plan will be linked to your goals. Traveling around the world? Have financial security?
These are just a few examples, write down everything that comes to mind. It’s very important that you know where to fit each of your goals. Some will need more time, others more money.
Put deadlines and values
Now that you know what your goals are, estimate the time and value to accomplish each one of them.
Remember that life is dynamic and everything can change, but it’s important to have a direction to follow.
Define goals and actions
Goals will help you reach your final goal. You set the goal, right? Now goals are actions that will help you get there.
Take action for your goals. It may be that you need to save a certain amount of money each month or start a plan to cut expenses.
Review your budget
Changes are necessary to achieve your goals, and since we are talking about long-term planning, a lot can happen along the way.
The family can grow, have a readjustment in the rent, change jobs, in short, things that directly impact the budget. So always review your planning.
Not to mention that some goals may need adaptation, be flexible to make these adjustments and see where you are doing better and what you can improve.
Start investing
To think in the long term it is essential to invest. You’ll be saving money every month, but nothing to keep under the mattress or in savings.
So, take the amount you are saving to start investing .
