Whether you’re a millennial, baby boomer, Gen X or
Gen Z, you face financial questions besides just
getting through to next payday. Here’s a simple Nike®-inspired checklist to help you start planning
with your money.
Just plan. Critical for long-term success, your
financial plan doesn’t need to be complicated, but it
does need to provide a starting point and create a
baseline for measuring your goals. Your plan can serve as a basis for budgeting too. If you're having trouble getting started, consult a financial
advisor to help get started.
Just invest. With time on your side, invest early on to
maximize your returns. Keep investments simple and
costs low initially. For instance, consider low-cost,
broad-based index funds in your portfolio to diversify
holdings, reduce management expenses and mitigate
Automating transfer of money from your paycheck to
your investment account streamlines this process.
You can start with a small amount of your pay until
you get more comfortable, and increase amounts
Just budget. You have to know exactly how much
you need per month to live. Guessing is just setting
yourself up for failure.
The easiest way to create a budget is to look at what
you currently spend. Grab your utility bills, bank
statements and credit card statements for the last
three to six months, and calculate how much you
spend in major categories like groceries, eating out
and car expenses.
These categories will change in retirement, but having
an idea of what normal feels like before retirement is
a good place to start. You should also factor in
inflation, which increases the price of goods each
While inflation is currently hovering around 2%, use a
more conservative estimate and assume that prices
will increase by as much as 3% to 5% each year.
Just plan for retirement. It’s never too early to
create a retirement plan. Retirement accounts provide
tax-deferred growth, a powerful feature to help boost
long-term returns and provide income decades from
now when you stop working.
If your company offers a 401(k) plan, see if your
employer matches a portion of your contributions. At
the very least, contribute enough to receive your full
company match, often around 5% of your annual pay
(though percentages vary).
You should also review what sources of income you
have during your retirement. This may include a
pension, Social Security or part-time work.
You also need to think about long-term care
insurance to pay for things like nursing home costs.
This can be costly as well, but the earlier you get into
a plan, the lower your overall premium is.
Just eliminate debt. Pay down all your debts by
your retirement date or even sooner. Getting out of
debt early in life makes retirement planning a much
smoother process. There’s nothing more terrifying
than having a significant drop in income because of
retirement and having a mountain of bills to pay.
Just cut fees. Creating a financial plan includes
physically reviewing all statements, pay stubs and
other financial documents – make sure you review the
actual documents, not summaries. Every fee means less money in your pocket. See how
many fees you can reduce or remove in the year and
reinvest those dollars in a retirement account.
Just look. If you neglected to open your brokerage
statements or log into your 401(k) account for over a
year, you’re long overdue. Make sure you saved
enough during the past year and are on track to save
enough before retirement. It is always a good idea to
overestimate your needs.
Just do it. According to reports from CNBC, 75% of Americans
are going it alone, without the help of a financial
advisor. The plain truth is that too few people plan
their finances, and if they had a good advisor, they
would be way better off.
Everyone should have a financial advisor. But not just
any advisor – a good advisor, and the right one for
Just do it.®
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