Financial planning can be a stressful concept for some people. It includes things like budgeting, retirement planning, saving, insurance and getting out of debt. Sometimes it’s easier to hire a financial advisor, but sometimes taking steps to lay the groundwork for your financial future can be done by you and your family.


The most basic level of personal finance is knowing that you need to create a budget. Budgets or a spending plan lays the groundwork to guide you through what you can spend for the month. A budget lists the income you have coming in and compares it to what you have going out each month. Creating a detailed budget allows you to not only make smarter decisions regarding your finances, but it also helps you cut back on spending money on things you do not necessarily need.

When creating a budget, you need to be 100% clear about the money you have, what you spend it on, and what is leftover at the end of the month. Ideally, you want to have a large amount left over which can be repurposed and used for savings or to pay off loans, mortgages and other bills that have accumulated over time. One of the simplest ways to create your budget is on paper, through a budgeting app, or creating a spreadsheet.

Cutting Expenses

Once you’ve successfully created a budget, it will be easier to see where you can cut expenses. The little things add up over time and can be easily cut out. For others, their budget may reveal that they need to take a closer look at their spending habits and make deeper cuts to create a wider gap between the amount coming in and going out each month.

It’s important to reduce your expenses as much as possible to free up more money in your budget, eliminate debt faster, and build up your emergency fund or grow your retirement savings.

Saving for Retirement

Fewer companies are offering pensions, and the availability of Social Security is still very uncertain, so saving for retirement is crucial. Unfortunately, after covering monthly expenses, many of us feel like there just isn’t enough money left over each month to put aside. But delaying your savings for later on in life can be costly!

Retirement savings should be a priority and not an afterthought. The IRS offers individuals special tax-advantaged accounts like 401(k) plans, special retirement accounts for self-employed individuals, and individual retirement accounts. These accounts are tax deductible and can offer tax-free earnings on some retirement savings. If you currently are not saving for your retirement, it might be time to readjust your budget and set aside money each month for later in life.