Financial planners are focused on the future, but for many people thinking 10, 20 and 30 years or more down the road is hard to do. When things are hard to do, people tend not to do them. So let's make it easier!
What will your next five years bring? To make it even easier, break it down in to one-year, three-year and five-year increments. Of course, financial planners are focused on things that have a financial implication to them, either an inflow or an outflow.
Don't let your life just happen to you. Take advantage of the opportunities!
Preparing for the Next Five Years
- If you are working, what will your income be over the next year? Are you expecting any potential pay increases, bonuses or stock option expirations?
- Do you have any debt, like student loans, car loans or home equity loans scheduled to be paid off? What will you do with the new found monthly money?
- Make a list of any home maintenance or improvement projects that you need to do or would like to do. You can't take on everything at once, so prioritize projects and space them out. Don't succumb to the advertising that says, "always keep improving," but don't defer needs so long that they become financially insurmountable.
For two to three years out:
- Are your kids going to college or graduating?
- Any potential weddings on the horizon?
- Any term life insurance policies expiring?
- Is it time to look at long-term-care insurance?
- Is it time to plan on replacing a car?
- Any special family birthday or anniversary celebrations?
Four to five years out:
- Depending on your stage of life, is it time to think about moving? You may need to consider downsizing or moving to a retirement community.
- Where are you on your "glide path" to retirement?
- Do you have any special travel plans? What's on your "bucket list"?
The lists could go on and on and be much more encompassing, but you get the point.
Don't Put Off Planning for the Future
Don't let your life just happen to you. Don't assume your spouse or significant other or family know what you are thinking either. Take advantage of the opportunities!