Dale Suezaki and Taylor Easley are financial advisers at Morgan Stanley, 329-7979.
Dale Suezaki and Taylor Easley | financial advisers
Putting finances in order
We all know the importance of saving to reach our financial goals. But how do you start saving? The first step is putting your financial house in order. Taking control of your finances takes some discipline, but the sooner it’s done, the greater the potential to reach your goals. The following paragraphs contain some useful tips to help you get started.
Get your spending under control
In order to maximize the amount of money available for investing for the future, you need to bring expenses down to a comfortable level. You may be surprised how much is being spent unwisely if you analyze where your money is going. To do this, write down in your daily planner all your expenditures. Whenever you reach for your wallet, jot down the amount. Keep track for three months, then review the results. Take note of necessary expenses you cannot avoid (rent/mortgage, student/car loans, car insurance, etc.), but pay particular attention to the ones over which you have control (clothing, dining out, entertainment, etc.). You may find it possible to pare down your spending on luxuries without sacrificing your lifestyle. Remember, each extra dollar that you save can be invested in your future.
Have a contingency plan in place
While it’s great to have a positive outlook toward the future, it’s important always to be prepared for an unforeseen event. Developing a financial contingency strategy can give you comfort. Whether it’s the loss of a job, a disabling injury or some other crisis, these types of hardships can put a strain on your finances. Begin by outlining all your monthly expenses for essentials: food, shelter, utilities, transportation, insurance, etc. Then begin accumulating an emergency fund sufficient to cover those expenses for six months. It’s best to maintain this fund in a liquid, more conservative vehicle such as a money market account. It’s also a good idea to reduce your debt, particularly on high-interest items. Another prudent step would be to review your life insurance and disability income insurance plans to be sure that they are adequate for your needs.
Establish your financial goals
It’s important to consider seriously what you would like to achieve and what is required financially to reach those goals. Your goals can be categorized as short-term (such as a purchasing a new car or home), more intermediate-term (financing your children’s education, starting your own business) or long-term (retiring in comfort, leaving a legacy for your heirs).
When deciding upon your goals, you should be as specific, and as realistic, as possible. Once you have determined your goals, you should prioritize them, judging which ones are the most crucial and which are less important.
Make a plan and put it into action
With your goals established, the next logical step is putting together a financial strategy that may help you achieve those goals. It’s critical that you start early, because the longer the time horizon, the more likely you are to reach your objectives. With the multitude of investment opportunities and financial services available today, it’s wise to seek financial help. A trained investment professional can provide information on a wide range of investment options, answer your questions and then work with you to help create a strategy that may help turn your goals into reality.
This article is published for general informational purposes only and is not an offer or solicitation to sell or buy any securities or commodities.
Dale Suezaki and Taylor Easley are financial advisers at Morgan Stanley, 329-7979.