Financial Planning

Now more than ever with our tough economy it is important to have a smart financial plan in order to obtain a life free from unnecessary anxiety. Planning for your future as well as living today is something that a good financial planner can help you establish. However, some of them are giving different and at times, contradictory advice. Tending to confuse rather than helping you out. One thing you don’t want to do is end up tarnishing your credit and ending up with bad credit loans in your future, so it is important to get it right now.

There are a few key rulings and ratios which may help you to identify your limited for saving and spending. Following some of these key rulings can help you to plan your financial strategy effectively and get you through your post and pre retirement times.

Age Does Make a Difference

Your age will play a key role in the amount of money you will need to save and your and where you even save or spend it. Someone just starting out of college, a youngster just getting ready to embark on their career can have a little more time ot start thinking of their nest egg and has more time to save for it. They have years to earn, save while absorbing some of the losses in savings and investments. They are young and have time to recoup from any losses they may encounter, long before retirement.

On the other hand, someone who is close to retirement can not afford to take such higher risks and does not have as much leisurely time to save and make these decisions. The time is now and they are going to need their savings quicker than the younger crowd. Now they need to think about safeguarding their savings.

A common formula used to help determine what your post retirement needs are is to aim for a savings of 12 times your present income (annually). The experts say that the post retirement person should be able to sustain a good lifestyle living on about 80 percent of the current income.

Housing Expenditures

A smart rule to follow in the financial planning would be to spend only about 30 percent of your yearly income on housing. This is a rule to help you keep enough of the money for other expenses that may come up.

Savings

There are any views on the amount which should be right to save when it comes to the income to saving ratio. Some say you should save about 10 percent of all your income continuously. This seems like an all right amount for the younger crowd, but the older, near retirement crowd would need a little better than that. Keep in mind that this amount would also depend on your personal factors like what your post retirement lifestyle was like, your earring capacity at retirement, your health, and a few other things as well.