We, T.L. Wall Accounting, are not financial planners in the normal sense. We don’t help you put money away for the future. We help with advice on budgeting issues, business or personal. What we’re trying to do is to get people thinking about their long term goals, whether long term means for the year or into retirement years.
We help businesses budget their money so they can first get all their bills paid, then be able to buy new supplies and pay employees. Once the really important stuff has been taken care of we talk to them about what they feel is important to them long term. We might recommend monthly stipends of some sort. We might recommend putting some money in a savings account or CDs, or something like that. We might recommend putting money into the stock market or working with a real financial planner that’s looking to help finance their future.
Short term budgeting is for things you may need fairly soon. Putting money away in case your car breaks down when your warranty has expired makes sense, as well as putting money away for a new car. Thinking about potential health care expenses also makes sense. Putting money away to replace or repair business equipment is essential; no one knows when their equipment is going to fail.
Long term budgeting is another animal entirely. How well do you want to live when you want to retire? Have you paid for a catastrophic insurance plan, or a plan that will help with possible nursing home expenses? Have you thought about a supplemental health insurance plan? What happens if you’re an independent business and you’re suddenly laid up and can’t work?
This is why financial planning becomes so important to do. It’s great living in the moment, but you never know when the next catastrophe might hit. Being prepared to at least deflect some of those things eliminates a lot of worry when they appear. It’s a smart thing to do, and accountants like us can offer assistance in helping you to figure these things out in advance.
Here are 4 tips towards better financial planning:
1. Start early
It’s never too early to start planning for your financial future, whether it’s for your business or personal life. You can start with small amounts until you get used to it and the increase, or start a little larger to see if you can maintain it. There are countless stories of people who didn’t make a lot of money at their jobs during their lifetime retiring as millionaires. It’s not as hard to do as you might imagine; it just takes some planning and talking to the right people.
2. Be consistent
Where a lot of people fail is that they don’t stay consistent with their finances. Budgeting will help, but many people hate doing it so it’s not a consistent behavior. Putting money away on a monthly basis is a smart idea, but the first time something comes up and that money can’t go into savings, most people give up their long term dream permanently. If you can stay as consistent as possible, things will invariably work out in the end.
3. Spend money wisely
There’s nothing wrong with wanting things, but there are ways to get what you want more responsibly. Paying $200 for a shirt that costs $20 made by someone else makes better financial sense. Making your own coffee on a regular basis and buying coffee out once a week does as well. Try not to be someone who buys something on the spur of the moment. If you see something you want, wait at least a day and think about whether you need it before you buy it. You might realize it’s not worth the expense; if it is, and it fits within your budget, then go for it.
4. Talk to a professional
We began this article mentioning our accounting firm. We also said that we’re not financial planners. There are a great number of them in every community, and you probably know people using some of them. Check them out before you call someone but definitely call someone and ask them for assistance. It’s true that some people have become millionaires by managing their money wisely, but unless it was a part of their job you can bet they didn’t do it on their own.
