Originally observed in 2002, Financial Planning Day is an annual event that offers the opportunity to get free financial advice and education by starting a conversation with a finance professional.
This year, Financial Planning Day will take place on October 9. In this post, we’ll take a look at the benefits Financial Planning Day offers individuals and small-business owners, along with their communities. We’ll also look at some of the key principles of sound financial planning.
The benefits of Financial Planning Day for individuals and communities
Financial Planning Day can help individuals and small-business owners address their financial needs in many ways, including:
- Free access to financial advice
- Help with budgeting, saving, investing, and retirement planning
- Reduced financial stress and anxiety
Besides individuals and small-business owners, communities at large will enjoy benefits like:
- Assistance for low-income and underserved populations
- Heightened community engagement and education
- Support for local economic development
- Business succession planning
Understanding the key principles of financial planning
Sound financial planning starts by taking a look at your whole financial picture, from budgeting for your current day-to-day needs to saving for your future aspirations.
- Budgeting and managing personal finances
A banker can help you create a livable and realistic budget that provides you (and your business, if you are a small-business owner) with a foundation on which you can build toward your long-term goals.
Here are some budgeting basics to get you started:
1. Create two lists. The first will include all of your income. The second list will include your normal monthly and recurring expense
2. If your income is limited or inconsistent, prioritize which expenses to pay first.
3. Once expenses are paid, any money left over can be put into savings and investments.
- Saving and investing strategies
No doubt, you have financial goals that go far beyond your day-to-day needs, such as:
o Buying a car o Purchasing a home
o Seeing the world o Growing your business
o Paying for a child’s education o Enjoying your retirement
Here are some saving and investing basics to get you started:
1. Pay yourself first. Set money aside after paying essential expenses, but before spending money on recreation or entertainment.
2. Make saving a habit. Set up an automatic transfer into your savings account of money from every paycheck, even if it’s just a few dollars.
- Debt management
Building a history of responsible credit use can open doors to borrowing for larger purchases in the future, such as a car or home loan. Managing debt effectively requires a sense of discipline, as well as plenty of patience and persistence.
Here are some steps you can take now to develop a personalized debt management plan:
- Track your expenses and income to better understand your financial situation
- Create a budget that prioritizes debt repayment
- Identify and prioritize your debts by interest rate, urgency, or balance
- Pay more than the minimum payment due on high-priority debts
- Avoid new debt while paying off existing debts
- Monitor your credit reports to ensure accuracy