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Any good financial plan should be based on two key elements: your current financial status and your future needs and wants. Too many people neglect both of these considerations and as a result, their plan doesn’t make sense when they look at it again in the future. Here are some easy tips that can help you create a solid financial plan based on your current situation and what you hope to achieve in the future. Financial planning: the two key elements you can t afford to overlook

Investing

A CD is a type of investment that provides a fixed rate for a fixed amount of time. Financial planning: the two key elements you can t afford to overlook

Insurance

When it comes to insurance, there are a few things that many people often neglect. One of these is disability insurance which provides income if an injury or illness prevents them from working. You can also purchase life and health insurance as well as make sure that your home is adequately insured against risks such as fire or burglary.

Financial planning: the two key elements you can t afford to overlook
Financial planning: the two key elements you can t afford to overlook

Saving

If you’re not saving now, it’s too late. Save as much as possible while you’re young and have time on your side. Give yourself a cushion when life throws unexpected curve balls, and have a nest egg of money for retirement so that you don’t end up working into your 80s. If necessary, cut back on expenses such as eating out or going on vacations, but make sure that saving is a priority in your budget.

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Loans

One thing that might be overlooked is your debt. The number one way to avoid being in debt is by not getting into it, but if you’re already there, then there are things you can do about it. One option for reducing your debt load could be taking out a personal loan with a low interest rate and pay off those high interest credit cards or loans.

Stocks

One of the best ways to protect yourself financially is by investing in stocks. With a little research and some luck, you can earn a significant amount of money without having to do anything but wait for your investments to grow. There are risks associated with this type of investment, but so long as it’s part of your financial plan, there are also plenty of rewards that make it worth taking some chances.

Financial planning: the two key elements you can t afford to overlook
Financial planning: the two key elements you can t afford to overlook

Retirement

With retirement so close but so far away, it’s important to start saving now. It may feel like a long time from now, but retirement is closer than we think. You don’t want to end up regretting not starting when you were younger. The best way to save for retirement is through your employer’s 401k plan or if they don’t offer one, an individual IRA. This will help ensure that your money is working harder for you and not sitting in your checking account doing nothing.

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By Niva Lohit

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