Finance for your future

Do You Have Your Finance Under Control? 

Take a good look at the need for finance control and what it really means to you. Most people like to think that they have their personal finance under control, but I suspect that if we are honest, there are very few of us that do.

Finance control does not just mean making sure your bills are paid every month, no, finance covers a lot more than that. It covers insurance policies taken out just in case, and an individual retirement account set up to help you when you are no longer employed.

It covers being able to pay off your debts, preferably before retirement, when typically income drops. It covers being able to cope with unexpected expenses. We'll take a closer look at these items and the state of your finance here.

In the past, there were no credit cards, and the saying was, if you can't pay cash for it then you do without. This was a good saying to live by, but not everyone is able to do that. These days teenagers seem to have a lot more cash available for what could be considered luxury items, but are these all paid for, or are they paid for with credit cards? To have financial control, you need to be able to pay off completely any debts that you owe right now, and that means credit card debts, car loans, or auto loans, or if you cannot do this straight away, at least you know that your income will cover this cost, with plenty left over for those unexpected expenses as well as an individual retirement account.

However, even when all your debts are covered, you are still not necessarily in control of your finance. Unless you have an individual retirement account into which you are paying regularly, and a decent amount at that, you cannot call yourself financially secure. Once you reach the age of retirement, your life is likely going to change considerably. Not only will you find yourself with no job to go to every day, but you will probably find that you want to do things, go places, eat out more, and enjoy life while you can. This will take money, and a state pension is probably not likely to provide you with these luxuries. So what this means is that you have to start saving and planning for your retirement, and start long before you are likely to retire too.

Take a look at how much you spend in a month. Are these expenses that you are likely to still have when you have retired? You may be surprised to find out how much you cannot cut from your retirement expenses, and this is before you even calculate in the rise in the cost of living. Multiply the amount you think you'll be spending every month by 12 to get your annual costs, and note that this is an after tax amount. Will you have this cash when you are retired? How long do you expect to live? People are living much longer these days, which means the amount for retirement needs to be bigger, much bigger.

Now take a look at how many years of work you have left to make this money, and work out what you need to contribute every year, and then every month to make ends meet in retirement. Will your finance let you do this? If so, that's great, well done! But if not, what can you do about it?

Whatever your answer, the best thing for anyone to do is to consult with a financial advisor, and let them guide you with your decision. After all this is their job, and they are familiar with all the pros and cons when it comes to finances. What you must not do is bury your head in the sand, and expect everything will be alright. Whatever your age, you have to get control of your finance plan now to help you in the future, otherwise you may have a very unrewarding retirement! And retirement shouldn't be about struggling financially, should it? So, take a good look at your finance plan for retirement, and make sure it will suit your needs.