Thinking Two Steps Ahead: How Financial Decisions Today Help Shape Your Financial Future
It is not always easy to appreciate how financial decisions you make today can have an impact on your future, but it is well worth learning how to think a couple of steps ahead if you want to improve your chances of enjoying a more prosperous tomorrow.
Here is a look at some of the factors that can definitely affect your financial future in either a positive or negative way. Including why your income underpins all of your plans, how being a wise consumer pays off, plus a tip to be as tax-efficient as possible.
What you earn
It might be obvious to say but it still needs emphasizing that if there is one factor that is going to be a major influence on how you fare financially in the future it is how much you earn.
Your annual income is the single most important factor and if you can concentrate your efforts on building a career that allows you the chance to enhance your earning capacity and enjoy a steady rise in income as you move up the ladder, this provides you will all sorts of options that you simply wouldn’t have if your income remained relatively stagnant after allowing for inflation.
It pays to be a savvy consumer
Choosing how you spend your money to get the best value is another good way of making the most of your money and allowing you the chance to keep more of your cash to put toward future financial targets and goals like a college fund for the kids and retirement.
If you are thinking about buying a car like the Dodge Charger, for instance, checking out factors like fuel economy, annual maintenance costs and other aspects of car ownership, can help you to make the most of your investment in such a big ticket item.
Even everyday purchasing decisions can have an impact on your financial health over time so look at ways to save money and avoid spending more than you have to on impulsive purchases that can make an unnecessary dent in your finances.
Investing for the future
You simply can’t expect to enjoy a bright financial future unless you put into action a plan that helps to make your dreams and aspirations a reality.
The sooner you start saving regular amounts the better chance you have of enjoying a more comfortable retirement and your aim should be to try and put away at least 10% of everything you earn if you are going to have a good shot at having the money you need in the future.
Make the most of the tax incentives available
We all have to pay our fair share of taxes but that is not to say that you shouldn’t try to reduce your tax liability where it’s legal to do so.
There are various ways to reduce your tax liability or take advantage of incentives, such as using your 401 (k) options to boost your retirement income without having to downgrade your standard of living in comparison to the extra amount of money going into your retirement pot.
If you don’t understand all of the options available to you, ask a professional and see how you can boost your financial future without it costing you any extra.
Make some of these savvy financial decisions today and see how it can have a positive impact on your future plans.