Budgeting is a crucial component of achieving your long-term financial goals.
As an experienced financial advisor, I have seen the critical role accurate cash flow statements have played in the retirement planning and transitions of hundreds of clients.
A comprehensive budget is unique for each client, and in my role as an advisor, a detailed budget helps me create recommendations on portfolio construction and retirement projections tailored to the individual.
Although the line items on a budget can be numerous, they all fall into one of two categories: musts and wants. Sorting your expenses into “musts” and “wants” will help you more closely monitor your spending and achieve your long-term financial goals.
“Musts” are essential expenses, usually (but not always) paid monthly, such as such as mortgage or rent, insurance, utilities, medical expenses, food, transportation and taxes. Non-essential expenses like entertainment, vacations, and gifts are “wants.” What you choose to spend on “wants” comes after your “musts” have been accounted for. You may want to go on vacation to Fiji, but you must pay your mortgage and utilities, and that must happen first.
Saving is a “must” for anyone accumulating assets for retirement. In order to make sure that your retirement plan contributions are done every month, it is best to set up an automatic investment plan to keep you on track. Employer-sponsored retirement plans like a 401(k) typically offer the opportunity to sign up for contributions that are automatically deducted from your pay. This way you pay into your retirement savings account first.
Not sure where to start? The Liberty Wealth Advisors team is happy to help you with any questions you have on budgeting and retirement savings. If you want to jump in right away, you can calculate your current cash flow using our cash flow calculator.
At Liberty Wealth Advisors, we provide a boutique, full-service wealth management experience for our clients. We value integrity, trust and transparency as we work together to achieve your long-term financial goals.