Financing Your Future

Excerpt From The Financial Shepherd

Why Dollars + Change = Sense by Glen Wright and Sy Pugh

If you plan to be financially independent, then you must plan to never run out of money, meaning that you have money left over (after you’ve met all your own financial obligations) that is passed on to family, friends, church and/or charity.

The key in making this plan successful is starting today – right now if you haven’t already. It doesn’t matter if you are 21 and just starting out in your career or 55 and well into your career and had a few bumps in the road. Take action now because you will never get this day back again!

The goal for funding an enjoyable retirement is wealth creation and wealth accumulation. Part of that process is paying down debt and the elimination of all bad debts. The other part is having more than enough income to cover all your expenses and unexpected emergencies. The final phase is growing the value of the funds you have acquired for retirement purposes, hence allowing your money to work for you. As you approach retirement, ideally, you should not have any credit card debts, other unsecured debts, auto loans, or any other types of revolving credit debt looming overhead. In a perfect world, you don’t want to still have a mortgage payment either, but that step may take a while to achieve. Although many people have a goal of paying off their home, this should only be a priority if the proper financial resources are in place. In the big picture, it makes more sense to put that extra money towards savings versus paying off the mortgage.

Speaking of mortgages, your housing decision is so important. To downsize or not to downsize… that is the question. Well, approaching retirement age, it usually makes sense to downsize for three major reasons:

  • Your home is now too big because the kids have grown up and moved out.
  • A spouse has passed away and now you are suddenly single.
  • You need to save some money and want something less expensive and more manageable.

Before making a major decision such as selling your home, be sure to check the market value of your home, then make sure that you can find something comfortable that is going to be less expensive. One extra point would be to remember that although you may pay less for a new, smaller home, it is vitally important to make sure there aren’t exorbitant hidden repair costs and maintenance fees. There have been many instances of people purchasing smaller, fixer-uppers, only to spend more money than they save making repairs. Although it appears to be a savings in the beginning, it ends up being a loss in the end.

Modern-day retirement has taken on a whole new meaning, and it is an ideal time to fulfill personal goals and lifelong dreams. Poor planning or lack of finances should not be obstacles in your golden years. Retirement should be an opportunity to enjoy family, friends, and the fruits of your labor; not to experience a whole new group of worries and anxieties that will keep you up at night. The best way to ensure that retirement is a time of pleasure and enjoyment is to make sure you put a solid plan in place – as far in advance as possible – and follow it toward financial freedom.