Tax Doesn't Have to Be Taxing

3 Factors That Influence Personal Financial Plans

Having an annual financial plan can help you to keep in charge of your finances so that you may reach all your goals. Consider the various factors when you are developing an annual financial plan.

Life Events

Your annual financial plan should reflect the specific life events that have occurred or are about to occur in your life. For example, a person who has just graduated from college may give priority to saving to raise the down payment on the house that they wish to buy. Similarly, a person who has just had a child can consider saving for the education of that child. In other words, life events can shape where you put emphasis when you are drawing up your financial plan for the coming year.

Investment and Retirement

Financial planning should also be shaped by what you intend to do about your various investments and retirement savings. For example, you can get ways to reduce your tax obligations on the stocks that you sold at a profit by selling those that have been making losses. Some of your profits on the good stocks will go to bridge the gap created by the losses generated by the underperforming stocks. Your overall tax obligation can go down when you make this smart move correctly.

Your annual financial plan should also consider reallocating your investments so that your portfolio is balanced. Do not forget to review what you have been paying in fees for the different investment or retirement accounts. Allocate your resources elsewhere in case you discover that a certain account has been taking an unacceptable amount of money in fees.

Emergency Preparedness

It is also important for you to think about your emergency preparedness when you are making your annual financial plan. For example, do you have money set aside to cater to your needs in case you lose a job for an extended duration? Your financial plan should cater for such eventualities so that you aren't compelled to divert funds from other plans, such as your retirement account, to attend to unavoidable situations that can arise (grave illness, for example).

It is often difficult for an amateur to develop their annual financial plan for the first time. Such people can benefit from seeking advice from a financial planner so that the process can be simplified. Based on these factors, you can draw a realistic financial plan that will cover all the essential aspects of your life.

About Me

Tax Doesn't Have to Be Taxing

If you find filling out your tax returns time consuming and confusing, then you are not alone. My name is Barry and I own a small business. Unfortunately, although I have started a very successful store, I do not really have a head for numbers. I made a real mess of my tax forms and it ended up taking me a long time to sort out. My friend recommended a tax service who produce all of my tax reports and returns. I have learnt so much from my consultant that I decided to start this new blog. I hope you enjoy it.



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