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A Solid Financial Start

You can get on the road to financial security even when the economy and the stock market are in a decline. The key is to develop a long-term plan for your life and your money. Many of us, when we’re younger, delay long-term planning because there seems to be plenty of time to get serious about it. Then, suddenly, we’re older, and we think it may be too late to rescue ourselves.

The fact is, regardless of your life stage, it’s never too early or too late to develop a roadmap to financial security, but starting earlier puts the advantage of time and compounding interest on your side.

Begin with a budget to track where your money goes. Allocate a percentage of each paycheck to savings so you’ll build up an emergency reserve as well as save money for big-ticket purchases. Make a list of your priorities and how much money you’ll need to achieve them. Be consistent and faithful about putting money into your retirement savings. Choose savings and investment vehicles that offer safety and a higher return. For example, rather than leaving your emergency fund in a checking account that pays little or no interest, open a savings account or buy Certificates of Deposit (CDs) to get a better return.

Be sure to have insurance coverage – health, home, renter’s, auto, and life – so you’ll be protected against loss if something unfortunate happens.

As your wealth grows, you’ll want to consider other options as well – real estate, annuities, life insurance policies, mutual funds, and other smart, tax-advantaged opportunities.

When you’re ready to invest in the stock market, consider buying mutual funds, many of which allow you to contribute small amounts of money each month. Look for no-load funds with low fees, and set up automatic investing. Invest the same amount each month, regardless of what the stock market is doing. This investing method is called dollar-cost averaging, which is the smart way to accumulate more shares over time.

Start saving for retirement as early as possible. Granted, it’s hard to do when you’re starting out and have car payments or student loans, but even a small amount will get you in the habit of saving. When you use automatic withholding, you won’t even miss that money. Employer-sponsored retirement 401(k) plans are one method to build retirement savings. At a minimum, contribute enough so that you’ll qualify for any matching funds your employer grants. When your salary increases, increase your retirement contributions, too.

If your employer does not offer a retirement plan, set up your own IRA, either Traditional or Roth. Our Roth vs. Traditional IRA Calculator can help you determine which type is better for your situation.

Look at your long-term plan at least once or twice a year and reevaluate your priorities. See where you want to make changes, increase savings, or shift money. As your family grows, you may need more life insurance to protect what you’ve built up. Ten years from now, don’t look back and be sorry you put this off. It could be the smartest thing you ever do – no matter when you start.

Products for this Life Stage:*

Get started simply.

Investing in mutual funds is a fast, easy way to get off to a solid financial start.

Put a plan into place.

Learn how life insurance helps to protect your family’s dreams and lifestyles.

Inspiration for A Solid Financial Start:

See what wealth building can create.

Here’s a fun activity that demonstrates the possibilities of sound planning; find out How to be a Millionaire.

Assess your monthly budget.

That first step is always the hardest. WSLife.com’s Budget Calculator Tool can help you track your monthly income and expenses.

Take a peek at retirement.

With some smart planning, you can look forward to a comfortable retirement. WSLife.com’s Retirement Financial Tools can get things started.

Jump start your retirement savings.

IRAs offer tax-deferred growth, and contributions may be tax-deductible if you qualify.

Western & Southern Life does not provide tax or legal advice. Please contact your tax or legal advisor regarding your situation.

*Products suggested for this Life Stage are not a specific recommendation or solicitation to purchase. Mutual funds are offered through an affiliate of Western & Southern Life.

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Last Updated: 12/14/2017