Building Financial Security

Building Financial Security

Some people have been down on their luck for most of their life and the prospects they have had to feel financially secure only occurred there was a positive balance in the checking account. Building financial security over a lifetime of work never occurred to those people because there was never enough money left over at the end of the month to build a financial future. With the advice of financial experts though, a financial future could have come from many paths.

Those that have saved money through a payroll deduction plan often feel more secure about their future. The balance in the savings account might be small, but then they notice that it has grown considerably over the last few months. With this form of encouragement to reflect on, some might be motivated to talk with a financial planner, even if that person was someone at work who worked in the accounting or investment division.

The short-term advice from those with a background in financial affairs might be to discover what dreams they had for the future and where that person wanted to be financially in as little as five years. When considering financial security plans for that duration of time, some people realized that not much could be done to achieve it if financial matters in their lives remained as they currently are. A financial planner might advise them to reduce debts and rethink credit cards with high-interest rates.

A financial planner might

t also advise that anything that can resell for a profit is worth protecting through insurance policies. A home mortgage loan can be one of the major purchases in a married couple’s life, and if it is lost through a fire, flood, or act of God, then the financial future of that family is left hanging in the balance. Adequate insurance protection will protect the monies spent on this important piece of real estate property. If a loss occurs, the structure can be rebuilt like new and the selling price would be considerably higher.

Building financial security includes protecting the interests of those left behind when a death occurs in a family. Maintaining a financial history of all monies earned through a lifetime of work will provide solid proof of any death benefits that are due. Military benefits could provide the children of veterans with a college education, and a life insurance policy would provide money for the family to live on, and another policy could provide financial security because the home mortgage loan balance could be completely paid off if the husband or wife died.

Participating in savings plans such as individual retirement accounts will build financial security later in life. The retirement plans might be to travel by recreational vehicles and the monies in those accounts could give the retiree enough money to pay cash for it. This cash would be supplemented by retirement funds supplied through Government retirement plans and an additional stream of income could be derived through a retirement plan from work.

Financial Planning & Money Management

If you’re a parent, you already know how much time and money goes into raising a child. And if you’re not yet a parent but you expect to be, you better be ready for the financial discipline required to raise a family. When the time comes, you’ll probably want your child to attend college so that he or she can have the best chance of making the most of professional opportunities in adulthood, and one of your concerns will be how much you’ll be able to help them financially to realize that goal.

The costs of sending a child to college have increased dramatically over the last several years, and the likelihood is that the trend will continue to rise. Our colleges and universities are among the best in the world. Many foreigners come to the U.S. to take advantage of that opportunity, and the competition for acceptance can be intense. What’s more, you can expect the annual cost of a college education to increase by as much as 10% annually, depending on the institution. Tuition for private education is always more expensive than publicly financed education (but that doesn’t necessarily mean that enrollment in a private institution is better than an education available at a state-funded school).

The question you face is twofold: What’s best for my child, and what can I afford? Obviously, the more children you have the greater the potential burden on you financially. How can

Do you make the most of your resources?

Teach your children at an early age about the value of money and how to earn and save it. The sooner they appreciate the concept of financial responsibility, the more they’ll be willing to generate income by working to help pay for their college expenses.

Encourage your child to maximize his or her abilities during the formative years. The better the habits developed as a student, the more he or she will benefit from an education, no matter where he or she is enrolled. Student scholarships are worth their weight in gold. And if your child is interested in athletics, an athletic scholarship may also be available.

When preparing your personal financial plan, be sure to allow for a reasonable projection of the future cost of a college education. Open a tax-deferred Education Savings Account (ESA) to help you accumulate savings, and make regular contributions whenever possible. Of course, the amount you can save and invest for this will depend upon what you earn and what your other current and future savings needs may be, so be sure to set your priorities accordingly and be realistic about your objectives and expectations. Applying for student loans may be necessary, but it will be better for both you and your children if you can avoid them whenever possible.

If you have more than one child, be careful not to favor one over the other when it comes to paying for their education. The possible negative implications might be worse than the challenge of saving for it.

Tips For Managing The Finances Of Your Business.

If you own a business — or if you’re considering an opportunity to buy one or start one — it’s probably because you have a product or service to provide to your marketplace for which you either have proven or believe that you have the requisite talents or skills needed to operate the business. Small businesses are the lifeblood of our economy. Without them, our country would never have become as great as it has. The greatest success stories are those of business owners who started from their garage or kitchen table, and the spirit of entrepreneurship continues to be one of the key ingredients in realizing the American Dream.

Unfortunately, the majority of small businesses fail within a few years. There are several reasons for this, but ultimately, success or failure hinges on the following key factors:

Do you have a sound business plan? It doesn’t have to be complicated, but you better make sure you’ve done your research and due diligence homework first. And be ready to act when changes in your plan are needed. Be careful not to underestimate the potential problems you may encounter or overestimate the potential financial rewards. Always provide for contingency plans in the event things don’t go as expected, and be certain you have an exit strategy in place if and when it is needed.

Are you willing to invest a lot of uncompensated time and effort to achieve success? Even the simplest business ideas may require significantly more effort than you realize.

Do you have access to enough financial capital to sustain your business? You may not need much financing, but you better have access to it when you need it and be aware of the risks involved. If your ship starts sinking, it may serve you better to abandon the ship and cut your losses rather than try to bail it out.

Have you made the most of your marketing and sales efforts? This determines your “top line” revenue potential. Without sufficient sales, it is obvious that no business can succeed. Find your niche and stick to it. Once you find it, chances of continued success are always better when you know your limitations and stay focused on what works best for you.

Do you have the labor and management help you need to operate the business? Sales mean nothing if you can’t sustain your daily business operations.

Do you have appropriate and timely accounting and bookkeeping controls in place? This is critical to evaluating your “bottom line” profitability, yet it’s often one of the most ignored or overlooked aspects of managing a successful business.

Is your return on investment sufficient to warrant your commitment of time, money, and effort? You need to know what level of achievement constitutes your definition of “success” to measure your progress.
And last — but certainly not least — do you derive personal satisfaction and enjoyment from running the business?

It is imperative that you carefully consider and revisit these questions when operating any business, to prevent your American Dream from turning into a nightmare.

 
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Financial Plans Throughout Life

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