A Five-Year Financial Plan has the power to get you where you want to be in the near future. Whether your dream is to pay off debt, buy a house, or go on a trip around the world-the five-year plan is uniquely suited to get you there fast. While saving for retirement happens over the course of a lifetime, five-year plans are designed to get you to intermediate destinations.
What Can You Do with Just Five Years?
You’d be surprised. In only five years you can accomplish one of the following: pay off all debt, create a generous emergency fund, increase your credit score significantly, or save up a down payment on a home. The power of this plan is its hyper focused and goal-driven quality.
Design Your Plan
While there are many ways to design a savings goal, you should follow a few guidelines.
First, make the focus of your five-year plan specific. “Save for a down payment on a house” is better than “have more money.” The more details you can list, the better. If your goal is to save for a house, estimate how much you’d like to put down and what you anticipate for a mortgage payment.
Second, your goal needs to be ambitious but achievable. Look at your total financial picture and create a goal that is possible. Falling short of an unattainable goal will only frustrate future savings scenarios. Make sure your goal takes into account your anticipated income and expenses.
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Third, write it down. Writing down your goals keeps you accountable. Consider creating a spreadsheet that tracks your progress. Keeping a visual record of your plan will help reinforce the habit over time.
Think Outside the Box
When creating a five-year financial plan, most people look to eliminating debt and savings. That’s great, but don’t let those two options limit you. Perhaps you’d like to start a business or change careers? What are the financial implications? Or, better yet, how can your finances enable you to weather those transitions smoothly?
Get Ahead of the Game with your Five-Year Financial Plan
Consider the shape you’d like to see your life take and have your five-year plan reflect that. If you’d like to conquer your dreams and transform them into a reality, contact the experts at Blisk Financial Group today.