October is Financial Planning Month! Do you have a financial plan? According to multiple sources, on average, only 27.88% of Americans have a financial plan. Without a financial plan, it can be hard to have a clear understanding of your finances. Jeff Bone, Family Wealth Planning Advisor at First Bank, says, “Financial planning is a foundational component of managing your finances, particularly when it comes to investing, retirement, and estate planning. Creating and reviewing your financial plan with your advisor will not only increase your chances of success, but it should also provide the clarity and peace of mind to treasure the past, embrace today, and plan for tomorrow.”
Here are six things to consider including in your financial plan.
1. Retirement savings
One important part of your financial plan is planning and saving for retirement. Saving for retirement can come in different forms, including IRAs and 401(k) plans. Each solution offers different benefits to help you meet your retirement goals. The First Bank Wealth Management team can help you get a clear understanding of your finances and help you develop a personalized retirement savings plan for the lifestyle you want to have in retirement.
2. Emergency funds
Do you have an emergency fund? This fund is a crucial component of your financial plan and can help you weather unexpected financial emergencies. Aim to have enough saved to cover three to six months’ worth of living expenses, which includes housing, food, transportation, utilities, and any other critical personal needs. An ideal way to help you save is to automate your savings. First Bank’s free savings app, Plinqit, is easy to use, securely links to your First Bank accounts, and will automatically save for you. All you need to do is set your savings goal and Plinqit will do the rest!
Learn how you to start saving for your emergency savings fund.
3. Down payments
Another component to consider including in your financial plan is saving for down payments. Whether you’re saving to buy a new home through First Bank Mortgage, a new car, or another larger purchase that requires a down payment, putting more down upfront can lower your payments and reduce the amount of interest you pay over the life of the loan.
4. College expenses
College expenses continue to rise, so saving as early as possible is ideal. Whether you’re saving for your child or for yourself, college can become expensive when you factor in things like tuition and fees, books and supplies, housing, transportation, food, and other things. Every person’s college experience will look different, so be sure to talk through relevant expenses with your financial advisor to save accordingly.
5. Life insurance
Life insurance helps protect your family from financial loss should something happen to you, so it’s important to incorporate this into your financial plan. First Bank offers three different life insurance coverages, including term life, whole life, and universal life. Our team of specialists will help you determine which solution protects you, your loved ones, or your business the best.
6. A will
One of the most important aspects of your financial plan is your will. A will ensures your assets are distributed smoothly and appropriately to your heirs and beneficiaries after you pass away. It’s important to have a will established because if you don’t, the distribution of your assets will be determined by the government. Plus, having a will in place avoids the need for your possessions to go through a probate.
A financial plan is a critical part of your finances. It can provide clarity on many aspects of your financial journey and help provide stability for your future. For more information on how a financial plan can benefit you, reach out to the First Bank Wealth Management team.
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