Whether it be to retire early, grow your investment portfolio, or save for a down payment on a new house, you likely have a number of financial goals in mind. The question is, how do you actually get there? You need a financial plan.

A written financial plan identifies and prioritizes your goals and then outlines the specific steps you need to take to achieve them. And while yours will be shaped by a number of unique factors, such as your age, career, family structure, inflation rates, and so much more, there are strategies that every planning process should include.

Here are 10 tried and true financial planning tips we believe you should follow along your financial journey.

Understand your financial situation 

Before anything else, you need to know where your money is going. What are your day-to-day, one-off, and long-term expenses? How much are you allocating to needs vs wants? Are there places you could reduce your spending? Taking stock of all of your expenses is the first step toward building a plan (or adjusting your current one) according to your current economic situation.

Define your goals

Understanding where you want to go is key to paving the road that will get you there. Are you hoping to retire by age 50? Do you want to own a certain number of properties? Whatever the case, consider the SMART acronym: Specific, Measurable, Attainable, Realistic, and Time-limited. Deciding on SMART short- and medium-term goals will help you create clear stepping stones toward your broader long-term goals.

Stick to a budget

You likely already know this well-known personal finance mantra: never let your expenses exceed your income. However, it’s easy to lose sight of this idea without a consistent way to manage your spending. With so many budgeting strategies to choose from, such as values-based or envelope budgeting, take the time to explore and find the approach that works best for you.

Max out employer contributions 

After decades of hard work, you want to enjoy your retirement years, but to do that, you need to build up your retirement nest egg. An employer-sponsored retirement account is a reliable way to do that, especially when you’re offered an employer match (sometimes referred to as free money). If you do have the possibility of an employer match, you want to contribute at least the minimum amount required to receive it.

Have a cashflow plan

Though often used by business owners, cashflow plans can benefit people of all professions, ages, and income levels. They take into consideration your assets, income, and spending to give you a look at whether your income is sustainable and help you allocate your money properly. This can be especially valuable during retirement, a time when establishing a steady income may be more challenging.

Deal with your debt

Be it credit card debt or student loans, debt can have a significant impact on your credit score and hurt your ability to get ahead financially. If possible, increase your debt repayment percentage to avoid high interest rates. At the very least, meet your minimum payments so you don’t end up incurring more debt.

Make smart investments

When chosen strategically, investments are a great way to boost your retirement savings. Some key investment principles include:

  • Knowing yourself as an investor: Consider your investment objectives, time horizons, and risk tolerance to gain a better sense of the types of investments you should be making.
  • Starting now: Compound interest is your best friend when it comes to investing, so the earlier you start, the better.
  • Diversifying your portfolio: If an investment value goes down, you don’t want to have all of your eggs in one basket. Instead, it’s best to spread your assets across various classes to help protect your money against market volatility.

Make tax-savvy decisions

Financial planning isn’t just about building your wealth. You also need to protect it, and one way to do that is by minimizing your tax liability. From understanding possible deductions to selecting tax-advantaged accounts, investments, and more, strategic tax moves can help you take bigger steps toward your financial goals.

Work with a qualified advisor

With so many moving parts, developing, implementing, and maintaining a holistic financial plan can feel overwhelming. This is where a financial advisor comes in. Whether you’re focused on developing a retirement plan, investment strategy, or anything in between, an advisor can help give you the peace of mind that you’re making well-informed decisions aligned with your needs, goals, and phase of life.

Review your plan regularly

Whether you created it yourself or worked with a financial planner, it’s important to review your financial plan regularly. Life circumstances may change and with them, your resources and objectives. Your financial plan needs to reflect these changes so you always remain on track to achieve your financial goals.

Looking for Personalized Financial Advice?

At Ironwood Wealth Management, we are here to help you ensure your finances are in order at every stage of life. But we are about so much more than simply offering the services aligned with comprehensive financial planning strategies. We commit to treating you with the utmost care and consideration. Connect with us today to get started.