Once we enter middle age none of us likes too much change or upheaval – especially when it comes to finances. Retired people are often afraid to invest because they do not understand their options or they have had bad experiences. If we do invest, we tend to do so conservatively. In this article, we will explain some of your options. Bear in mind, however, that we cannot outline entire money management programs in such a brief space. Our main intent is to make you see that financial planning can be very rewarding.

Financial planning: A few easy steps

Times have changed and life has become more complicated. It’s hard to believe that in the early 1970s, a new Chevy cost $2,800 and a new house cost $26,900. Nowadays, each of us struggles to understand an embattled economy, rampant inflation, a rolling stock market and an indecipherable tax system.

To those of us who can afford to, hire a professional consultant. Even if you can afford that, you need to understand the basics of finance in order to make your assets grow. If you don’t know the rules, you can’t play the game.

Write down your goals

The most complicated of problems are easy to understand if reduced to basics. Having a hard time understanding your own and your spouse’s financial status? Make a list of your goals – both immediate and distant.

First, you will need to decide what your most important priorities are. Chances are they are among the following: savings, insurance, retirement fund, tax structure, estate planning, investments, legacy to heirs, charitable donations, personal financial security and children’s tuition.

The second step is to gather the insurance policies, tax returns, canceled checks, papers, savings book, etc that have to do with your finances. You cannot make plans for the future if you don’t know what you have.

The third step is to make a budget. A practical, realistic budget takes into account all members of the family and their various needs. The best budget encompass the following: house payments, automobile payments, upkeep and gas, food, tuition, childcare, utilities, clothing, doctors and dentists, entertainment and travel, charitable donations, savings and investments.

Most people’s budgets omit two important parts of life: whim and emergency. As you and your family draw up a plan, be sure to add money for fun (a new boat? a trip?) and a savings account. The best planners save for emergencies. Good planning seems so wise. Yet, incredibly, many people don’t bother to take the time or they only do so after they’ve made expensive mistakes. This is the best way to plan your budget:

* Determine your monthly and annual income

* Fixate your spending

* Decide what you and your family want to spend on in the future

We cannot emphasize enough the need to understand your own finances. With an investment of time on your part, you will be able to pay off debts more easily, build up your nest egg and take full advantage of tax breaks.

Financial Planning After Retirement

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