Personal Finances: Are You Planning Ahead?
One of the most important aspects of getting your personal finances in order — and working for you — is planning ahead. My Dollar Plan has a great post on some areas that you should consider when creating a financial plan:
- Saving for college.
- Pick a house for your intended family size.
- Plan ahead for financing needs (when borrowing for large purchases like homes and cars).
- Start saving for retirement NOW.
- Get a marketable degree.
- Match your goals with your finances.
I think the point here is that you need to plan ahead. You won’t be successful in building your personal finances if you don’t make a plan. This means that you need to sit down and really think about your priorities — figure out what is important to you.
While we are setting aside money for our son’s education, it’s not actually a high priority. (You might have a different priority.) We’re just getting the account started. It will be up to him to do most of the funding. I think that my son should contribute to his education. My parents helped me with living expenses, but always made it clear that I would be responsible for my own tuition. (I worked hard for scholarships as a result.) I plan to do something similar for my son — teaching him the importance of planning ahead
Think about the expenses that are likely to come up in your life, and make a plan for dealing with them. And one thing that I thought should have been on the list was this: Set aside money for a rainy day. Because sometimes you can’t always plan for everything.
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3 opinions for Personal Finances: Are You Planning Ahead?
Bob Turek
May 6, 2008 at 2:09 pm
Miranda- this issue is near and dear to my heart. I was on a great track to fund college educations for my three daughers when the tech bust hit. It was a very difficult period that drained our funding pretty quickly. Fortunately I made a good move to pay down the house note by a large amount the previous year which saved us thousands in interest for the next few years. Also there is a little know IRS caveat that allows you to take money out of an IRA without penalty if the money is used to pay tuition. So, everything worked out pretty well.
miranda
May 6, 2008 at 2:33 pm
Thanks for sharing, Bob! You’re right about education as being one of the exceptions to the early withdrawal penalty fro an IRA. I’m glad things are working out. And, hopefully, you’ve paid the money back to the IRA…
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