6 Questions to Ask When Improving Your Finances
If you want to maintain healthy finances but need help figuring out where to start, beginning with small, consistent steps can help you grow your wealth and plan for the future. These questions can help you proactively improve your finances in the short term and achieve long-term financial stability.
What are your financial goals?
Speaking with a financial professional can be beneficial to discuss your goals and time horizons. You may have short-term financial planning goals, like contributing to an emergency fund every month, or long-term goals, such as budgeting for retirement or extending your wealth for the next generation. Considering what your financial goals are helps you get clear about what your motivation is and the steps you’ll take to get there.
Do you need to create a budget?
Budgeting is fundamental to managing personal finances, no matter what stage of life you’re in. Once you’ve chosen the financial goals you want to achieve, consider your budget and where your money is going. By doing this, you can track your income and spending, pay down any debt you might have, and potentially prioritize growing your wealth by discussing your investment options with your financial and tax professionals.
Do you have an emergency fund?
Even with a budget, unplanned expenses can still affect your finances. An emergency fund is a critical safety net that can help you pay for unexpected expenses without going deeper into debt. The ultimate amount to put in your emergency fund depends on your income and savings, so you can start small if needed. Remember that even small amounts grow over time.
Do you need to rebalance your portfolio?
Checking if your portfolio is aligned and on track at least 1-2 times yearly is a good idea. Certain factors can throw your portfolio out of balance, so it may not be as diversified as you wish. This can affect your financial plan in the short and long term because you might need to improve your financial situation more slowly or gradually.
Are you keeping current with your financial literacy efforts?
Staying informed can help you make the best decisions for your financial situation. By reading online articles from reputable sites like Investopedia, listening to podcasts, and consulting with financial professionals, you’ll be able to improve your financial literacy, which can help to increase your savings habits.
How will your tax obligations affect your financial plan?
Efficient tax planning is essential to any financial consideration and should always be factored in as you’re looking to improve your finances and grow your wealth. Tax planning allows you to be strategic with your investments and contributions and minimize your tax liability.
Discuss Your Financial Goals with Chatterton & Associates
You can steadily build a solid financial foundation by prioritizing your financial goals and working toward them with the help of your financial professionals. Discuss your financial needs with the tax and financial professionals at Chatterton & Associates to ensure you’re improving your finances according to your risk tolerance preferences and time horizons.
Sincerely,
The Team at Chatterton & Associates
