If you and your spouse are serious about establishing a strong financial foundation, long-range planning and budgeting are two of the most important things you can do. Though they’re different, both require you to assess your needs and goals, both now and in the future.
Long Range Financial Planning
Long-range planning for money-related goals usually happens as part of an overall financial plan for your family. It requires you and your spouse to sit down and think about what you want to achieve over your lifetime, and how you will pay for these goals. Do you want to travel the world in retirement? Help adult children buy their first home?
Once you identify the goals, a financial plan provides the steps to help you reach them. When your financial plan has been set up you should review it once or twice a year or when you have a significant life change such as a new baby or job change.
Continuous Monthly Budgeting
While long-range planning deals with finances in your future, budgeting deals with your immediate money decisions. It involves daily or weekly hands-on activity as you track your spending to make sure it remains within the limits of your net monthly income – the income you actually get after taxes and deductions come off. Many families start monthly budgets because they want to redirect some of their monthly spending towards the goals of their financial plan.
Do We Need Professional Help?
People usually tackle budgeting on their own without professional help. It is fairly easy to track your monthly income, receipts and bills and record them in a notebook or on your computer, and there are many online budget worksheets to help families create personalized budgets.
When it comes to financial planning, you may want to seek the expertise of a financial planner. These professionals have credentials and training that help them assist you in making investment and financial planning decisions and in setting up retirement and college funds, debt repayment plans, and in some cases they even provide life insurance advice and products.
Benefits of Budgeting and Long Range Planning
Both of these activities will greatly benefit your finances as you learn how to manage your money. They get you thinking about how you spend your money each day, and how that will affect your future.
Budgeting may uncover spending patterns that can be changed now to help fund your long-range planning goals. Discussing your long-range financial plans can open up conversations between spouses about how each views an ideal retirement. It may even convince a reluctant spouse to take budgeting more seriously.
Don’t wait to get started. Grab a pen, paper, your spouse, and begin jotting down a few long-range financial goals.