It’s never too early to start planning for a better financial future. Many individuals find themselves questioning whether they are on the right track to a better financial future while others may not know where to begin. At First Savings Bank, one of our goals is to provide practical information to empower you to make informed financial decisions, no matter what stage you are in.

What is Financial Planning?
Financial planning involves setting and achieving financial goals through a systematic approach. It includes self-evaluation, identifying long-term objectives and creating a manageable plan to achieve them. There is a common misconception that you have to be rich in order to start financial planning, which isn’t true. Financial planning is beneficial to everyone and the earlier you start the more time you have to save and grow your investments.

How do you efficiently plan for a better financial future?
One key step to financial planning success is to set manageable financial goals. There is an acronym used to help create clear and specific goals. SMART is a universal acronym that helps outline the criteria for making financial decisions, it means be Specific, create Measurable goals, ensure the goal set is Achievable while also being Relevant and outline a Timeframe for each of them. Setting manageable financial goals means you need to prioritize them based on the urgency and impact it will have on your wellbeing. When you break each goal down to actionable steps and set deadlines you will easily be able to track your progress and adjust as needed.

After you have established your financial goals, you can now create a path to achieve them by building a budget. A well-planned budget helps you to control your finances, track expenses, save money and reduce debt. Here are some tips:

1. Start identifying your goals: Understanding how much you need to retire or how much you need to save for a new car will start helping you look for areas in which you can cut back and help create a budget that works for you.
2. Create a plan: Once you know where your money is going and what you can save, you can choose a savings strategy that helps you meet your goals.  
3. Use the 50/30/20 rule: According to the rule, 50% of your income should be spent on essentials like rent and utilities, 30% on non-essentials and 20% should be saved.
4. Automate your savings: Set up automatic transfers into your savings account to make savings effortless.
5. Review regularly: Review your budget regularly to see if you’re on track and make adjustments as needed.

Budgeting isn’t hard, and when done correctly can help you cut unnecessary expenses, saving you money over time.

After building a budget you should start noticing you have more money in your account each month. So, what do you do with the extra money? Building an emergency fund is a crucial step for financial stability, and having a sufficient emergency fund provides security, especially when life throws the unexpected at you. There are many savings options you can look into to help your emergency fund grow. Some of the more common ones are savings accounts, money markets and CDs with higher interest rates. You should explore all these options and find the one that works best for you.