Now that you have completed
your analysis, it is time to create
your action plan for next year.
Your Savings Plan
You can begin by developing
your "Savings Plan," including the
amount you plan to save and the
method you will use to save it.
An effective savings plan begins
with the basic elements.
-
Start saving early. The
earlier you begin, the more
money you can potentially
accumulate.
-
Save your pay increases.
Either put the money into
your retirement plan or into
another savings plan.
-
Establish an automatic
savings plan. Have money
deducted from your pay or
your bank account and automatically
deposited in a
savings or investment account.
| Savings Plan |
| For the year beginning _______________ and ending _________________. |
| Amount to be saved this year: |
$ |
| Amount to be saved each month: |
$ |
| Description of savings methods: |
|
Your Investment Plan
Next, examine each of your
goals to determine whether it
is a short-term (0 to 3 years),
intermediate-term (4 to 6 years) or
long-term (7 or more years)
goal. This will be determined
by the length of time you have
until the goal’s target date, or
until you will need the money
allocated to that goal.
For each of your goals, consider
how much investment risk
you are willing to take for the
goal. Generally, the riskier an
investment, the more it fluctuates
in value. Its potential
return is greater, but so is its
potential loss.
To determine how much risk
you are willing to take for each
of your goals, consider the
following.
How essential is the goal?
Can you afford to lose any
or all of the money you are
investing?
Do you want
to protect that money — even
if it means potentially lower
returns?
|
Basic Money Management
Basic Money Management
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