5 Money Management Tips to Help You Plan For Your Future

plan for your futureMoney plays a huge role in our lives every single day. If you think about it, a good portion of our day is spent either making money or spending money. And when we are not making it or spending it, we are most likely thinking about it. We make plans for next week and next month. We think about the goals that we want to achieve now and in the future. We think about our financial security and our retirement. And pretty much all of that will require money at some point.

Because money plays such a big role in our lives, it is extremely important that we manage it well. Managing your money well allows you to live a fun and happy life now, and it makes it so much easier to plan for your future.

Money Management Tips to Help You Plan For Your Future

Establish Your Priorities

An important step to managing your money well and living a happy life is to establish your priorities.

You need to consider where you will live. Will you live in your hometown, or possibly overseas?

Would you like to own your own home, or is renting the right option for you?

Will you marry and have a family?

How many vacations will you take each year?

What kind of car would you like to drive?

How much money do you need to save for your retirement?

Each point will involve money.

As you consider each point, think about how much it will cost you, and how much you are willing to spend. Sometimes the two do not match.

For example, a nice 3 bedroom family home may cost you $450,000. But you may only be prepared to spend $350,000 so that you can afford to take one or two vacations each year. So you need to consider which item on your list is a higher priority for you – the nice family home, or taking vacations.

Clearly Identify Your Sources of Income

Will you work at a traditional 9 to 5 job or will you own your own business?

Will you travel around the world while earning money as a freelancer or a business consultant?

Will you earn money from real estate or stock market investments?

Once you establish your sources of income you will find it easier to work on identifying your priorities because you will know how much money you have to work with.

Create a Spending Plan

The two most important factors that you will need to consider when you work on your spending plan are your sources of income and your priorities. Together they will dictate how much money you have to work with, what you will spend it on, and how much you will save for your future.

Protect Yourself and Your Money

When you find yourself unable to sleep at night does your mind instantly begin worrying about things?

What keeps you awake at night? When I have trouble sleeping I find my mind instantly begins to think about the things that I have been procrastinating about. And one of the things that I have been procrastinating about is getting our wills done. While our wills will actually be easy and pretty straightforward to do, they need to be written up and finalized.

You can protect yourself and your money by writing a will that directs what happens to you and to your money in the event of a tragedy.

Of course it is also very important to protect yourself today. Make sure that you have all of your insurance policies up-to-date, with enough coverage should anything ever happen. This includes your life insurance, health insurance, disability insurance, as well as your home and auto insurance.

This will give you a sense of financial security and peace of mind because by having all of these items in place you and your money will be protected.

Plan for Your Future

Begin thinking about your retirement, even if you are only in your twenties. Would you like to retire at 35 and be financially independent, or are you happy to work until the day you die?

Many people do work well into their 70’s and 80’s. Not necessarily because they need the money, but because they truly enjoy what they do, and having something important to do each day helps keep them healthy and fit.

Only you can decide what you would like your future to look like. Allow yourself to dream about your future, and consider how much money you will need to begin saving now to ensure that your dreams come true.


    • Dean

      Dean 11/03/2013 3:24 p.m. #

      Nice article! I think creating a spending plan is so hard to do and stick to. That is where I personally have the most difficulty. Thanks for the tips.


      • Sicorra

        Sicorra 11/04/2013 10:37 a.m. #

        A spending plan can take some time to get use to. I found it hard at first too, but just kept pushing myself to see each month until it became second nature to us.

    • FI Pilgrim

      FI Pilgrim 11/04/2013 4:50 a.m. #

      To me, planning for the future makes the biggest difference in money management. When you see the impact that your choices will make 15, 20 years down the road it really affects the way you manage your money today.

      • Sicorra

        Sicorra 11/04/2013 11:22 a.m. #

        I agree that it does make a big difference. It is still something I struggle with but am working hard on changing my mindset.

    • DC @ Young Adult Money

      DC @ Young Adult Money 11/04/2013 5:28 a.m. #

      I think having a goal for retirement, whether it's an age or an amount, is a good thing. If you want to retire at 35 you likely will need to work more than one job or find a way to make quite a bit more income than from just a 'regular' 9-5. It's doable but it requires planning for sure.

      • Sicorra

        Sicorra 11/04/2013 11:24 a.m. #

        Yes, it does require working harder earlier in life if you plan to retire at 35, unless of course you have a huge trust fund waiting for you, or something like that ;-)

    • Laurie @thefrugalfarmer

      Laurie @thefrugalfarmer 11/04/2013 6:06 a.m. #

      Love the tips about establishing your priorities, Sicorra! This has been life-changing for us as we now ask ourselves whether or not our purchases fit in with those priorities, and it has really changed how we spend our money.

      • Sicorra

        Sicorra 11/04/2013 11:26 a.m. #

        Thanks very much Laurie! You and I are on the same path when it comes to finances. We had to make these changes as well, and while it sometimes feels difficult it also creates a sense of relief when you are able to cover all of your bills without hesitation.

    • Corina Ramos

      Corina Ramos 11/04/2013 6:40 a.m. #

      You have certainly put some great tips together! Before we didn't think about planning for the future but now every purchase we consider making we bring up our retirement.

      The only thing we have to work on is protecting ourselves and money. We haven't gotten around to doing our Wills either. I do think about it but always say I have time and I know better than that. :)

      Thanks for sharing these great tips my friend! Happy Monday. Let's catch up soon!

      • Sicorra

        Sicorra 11/04/2013 11:30 a.m. #

        Thanks Corina! Sounds like we are in the same boat when it comes to our Wills. I don't even know why I put it off, I just do. Last night on Long Island Medium Theresa met with a lawyer to sign her Will and I thought there's another sign telling me to get it done.

        Have a great week!! Talk soon.

        • Corina Ramos

          Corina Ramos 11/08/2013 8 p.m. #

          I've seen her on a talk show but never watched her show...she's got some long nails, lol.

          I would have taken that as a sign myself. I keep putting it off too. I guess because it's so final. I keep saying to myself...When I'm 50.

          Thanks for sharing your post with us Sicorra! Have a great weekend my friend. :)

    • Shannon @ The Heavy Purse

      Shannon @ The Heavy Purse 11/04/2013 10:42 a.m. #

      Great tips! Establishing priorities are so important. I see a lot of people buy homes without considering the other things they want to do, so they end up with too much home and no money for vacations or other activities. I agree that many people do choose to work in their 60's and 70's because they love what they do and want to stay active - my Mom is in this camp. Unfortunately the flip side is there are also quite a few people who work far longer than they would like because they need the money, which is why it is so important to plan for your retirement. It always surprises me how few people really know how much they will need in retirement and wait until they are closing into retirement to really start saving.

      • Sicorra

        Sicorra 11/04/2013 11:34 a.m. #

        Thank you Shannon! I have definitely bought homes in the past that I felt I could afford, but each time I didn't take into consideration other things that I wanted to do in life. So while the house expenses were covered there was little leftover for other things and I felt like I was simply working all the time to pay my mortgage. We all learn from experience though.

    • Arelis Cintron

      Arelis Cintron 11/04/2013 12:34 p.m. #

      It's so important for young people to think about it! So many things will not be available at retirement age that others have now at retirement. Also if you knew you could retire at 35 would you handle your finances different? I think so!

      Great tips!

      • Sicorra

        Sicorra 11/04/2013 1:15 p.m. #

        Thanks Arelis! Yes, it is important to think about your retirement when you are young and to begin planning. It simply makes things easier as you reach whatever age you choose to retire at.

        • Arelis Cintron

          Arelis Cintron 11/13/2013 3:20 p.m. #

          Yes I wish I Knew then what I know now!

    • CarolB

      CarolB 11/10/2013 5:58 a.m. #

      Great tips Sicorra. It's amazing the number of people who don't put any thought into saving for their future. We started retirement savings when we were in our 20's, long before any of our friends were saving. I encourage my nieces and nephews who are now in their twenties, to not put it off. Some have listened, and others not so much.

      It's also why I still drive my ten year old car, and why we bought a house well below what we qualified for. Something our realtor kept telling us ... you qualify to buy more of a house ... I think often gets people in trouble when making that home purchase. We knew we wanted to be able to travel with our kids, to save for retirement, and not live "just for our house" so we didn't listen to her words! Twelve years later after buying this house, I am so glad we didn't!

      • Sicorra

        Sicorra 11/10/2013 5:54 p.m. #

        My parents financial habits were very similar to what you practice. They drove their cars for 10 years or even more sometimes. They owned a very modest home and paid it off in their fifties. They rarely traveled, but like you, they did very well in saving for their retirement too. It is a good position to be in, and good for you guys for doing such a fantastic job with your money.

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