September 15th, 2020
The 3 S’s of your Financial Plan: Spending, Saving, Structure
Twenty Fifty Capital firmly believes in creating a strong foundation for your financial plan. Getting your spending under control, an ongoing savings and investment plan, and the correct account structure in place is key to your future success.
First, create a budget. We know this isn’t fun and you could probably think of better things to do in your spare time, but we promise it will be worth it in the long run. As you create a budget, be honest with yourself about how you spend your money (budgets aren’t “one size fits all” and your personal budget is likely very different from your best friend’s budget.). An honest budget leads to correctly forecasting upcoming expenses, which will increase your ability to stick to your budget. Budgeting promotes wise and purposeful spending.
Once you have a reasonable budget in place, you can begin to think about saving. Your savings, or “inputs” in financial terms, dictate the value of your portfolio, otherwise known as outputs. The earlier you begin to save, the better return you will experience later on. In short, the earlier you save and invest, the more time your investments will have to grow. The larger your investments grow, the sooner you can live off of your investment income. In other words, you can retire young with fewer wrinkles and less gray hair!
Finally, focus on the structure of your financial plan. Building a proper foundation will increase the overall “bang for your buck” in a few different ways: decreasing your overall tax liabilities throughout your life, increasing your investment return through proper asset location, and decreasing your risk through diversification.
A certified financial planner will help you navigate the intricacies of your individualized financial plan. Always bear in mind the value of the 3 S’s: spending, saving, and structure.