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FINANCIAL-PLANNING

Avoiding Financial Fright

by Peter J. Creedon

Although a lot of people love the thrill and spookiness around Halloween, it seems like some are in fact much more scared of their own finances. People are flocking to go to the haunted houses, but to financial fright on the other hand, few would get in line.

Being terrified of opening up your account statements, let alone investing in the stock market can be frightening. It’s time to face your financial ghosts and gremlins and set yourself up for financial success. The worst financial strategy is not having a plan to navigate life’s path and wandering the financial forest by sacrificing long-term investing gains because of your financial fright. Tackling your finances does not need to be a scary process, but the longer you postpone it, the worse it’s going to get. The key to staying on top of your finances is being proactive and organized. Keep the fright in Halloween, but out of your finances.

How to Avoid Financial Fright

Get Educated

The more you know about your finances and investing, the less scary it gets. Research finance and investing books, blogs and webinars to educate yourself on the topic. Knowledge may help you reach your wealth planning goals.

Follow a Budget

The main purpose of living with a budget is to have a set system to keep track of your daily, weekly, monthly spending and income to ensure you will reach your financial goals. The rule of thumb is always: Spend less than you make. A budget can be boring that is why I suggest including vacations and rewards for working. This way you can avoid the oh so terrifying “Declined” notice when you swipe your credit/debit card and have a clear monthly and yearly plan for how to use your money in order to reach your financial goals. Mint.org is a budgeting app that makes it easier for you to keep track of your budget and hold yourself accountable.

Plan For The Unexpected – Set Up an Emergency Fund

An emergency fund is part of a cash reserve, which is simply extra money set aside to handle unexpected events that happen in your life. What happens if you get into an unexpected accident, your toilet explodes and leaks in your apartment (talking from experience here), or you lose your job? Be prepared for unexpected events and ensure that you have at least 3-6 months’ worth of monthly expenses easily accessible in a savings or money-market account. If you are a freelancer or other professional where your income varies, you may want to raise this to 9 months of monthly expenses.

Make The Most of Your Income

When working towards reducing financial fright, a common speed bump is believing that you do not have enough money in order to reach your goals. A great tool to use to see how much money you can save by making small changes to your budget is a spending calculator. Check your IPhone App or Android Play Store for financial calculators.

Don’t Face It Alone – Hire a Certified Financial “GhostBuster” Advisor

You don’t need to fight the ghosts alone, there are plenty of trusted professionals out there that are able to help. Financial advisors that hold the CFP® certification are recognized for the highest standard of excellence in competency and ethics in the financial planning industry. Working with someone that is an expert in his/her field and who you can trust can make your financial situation far less $pooky.