How to Put Together a 10 Year Financial Plan
Ten years may seem like a long time, however if you’ve noticed how fast the 2010s went by, then you’d realize that 10 year goals aren’t too far off at all.
Your plan should be based off of your personal financial goals, the life you envision living, and the moments you want to experience. Each goal should be segmented into short-term goals that you can assess during your journey in reaching that larger goal. This check-in should be at least every six months to make sure your staying on track and if necessary make the right steps to make adjustments. Here are some goals to plan for the next 10 years:
Increasing Income
Having multiple streams of income is necessary to improve your financial situation. One of the best ways to increase your income is through passive income, or income earned without being actively involved. While it does take effort to begin sources of passive income such as rental properties and online businesses, passive income shouldnt take much effort after it’s established. Make plans to develop and incorporate passive income into your income stream
Building an Emergency Fund
The standard emergency fund for unforeseen circumstances should cover at least 3 to 6 months of expenses. A more strict fund includes your monthly expenses devoid of outings, shopping and entertainment. However, if you want to be more prepared, then feel free to grow a fund that has enough to keep up with these additional expenses and that can survive a longer period of time. This fund is critical to keeping your head above water when disasters occur.
Paying off Debt
Come up with a plan utilizing the Snowball or Avalanche method to tackle your current debt. Your priority should be on any credit card debt that has high interest rates. This type of debt can be crippling and can have you stuck in a cycle of just paying off your minimum.
Preparing for Retirement
You can accrue a hefty amount of retirement savings within ten years, the hardest part is starting. Start by using Vimvest to create a long-term retirement goal. Having enough for retirement is based on the lifestyle you desire during your retirement. Most people plan to spend $50K to $100K per year in retirement, so the suggested retirement is usually at least 10 to 12 times your annual income. However, if you foresee yourself going on various trips and splurging during your retirement you should increase your retirement fund to cover the additional expenses.
Investing for Growth
Saving is necessary for financial stability, but investing is crucial to experiencing financial growth. If you haven’t gotten involved in investing, then these next years are the perfect opportunity for you to start. It’s as easy as starting an investing goal in the Vimvest app.
Lifestyle Goals
Come up with a plan utilizing the Snowball or Avalanche method to tackle your current debt. Your priority should be on any credit card debt that has high interest rates. This type of debt can be crippling and can have you stuck in a cycle of just paying off your minimum.
