Financial Planning for in Your Twenties for a Better Today and Tomorrow

No matter how rich or poor, young or old, you are, everyone needs financial planning. It is vital to keeping track of those daily, weekly, monthly payments and deposits that life is made up of.

Most people choose to spend their twenties and even early thirties having fun and blowing money as if it grows on trees. Although this is extremely tempting, it is best to start planning your financial future as soon as you enter the work force.

I know what you are thinking: the future will never come. It’s better to live for the now, not the later. You’re only young once.

This is all true. However, you can still enjoy your life while securing your financial future.

We cannot predict the future. The stock market and the economic recession is a perfect example of this. We do not know what the future holds, and this means that the more financial security we have now, the better off we will be if or when times get tough.

Here are three good reasons why financial planning when you are young will benefit you, not only in the future, but in the present as well.

1.	It can bring comfort and security: Establishing a nest egg and even a retirement fund allows you to feel secure about your future. Furthermore it can give you something to look forward to and a sense of purpose to get there. Financial planning will also provide you with comfort during the present. You do not have to live life pay cheque by pay cheque. After all, you never know if something may happen to you, your company or your job.
2.	It will finance your transitions: For most people, their twenties and thirties are all about transitions: transitions from college to the real job force; transitions from renting to buying a house; transitions from single to married life. All of these transitions require money. It’s best to get a start on these early so you are not spending your thirties and forties knee deep in a debt you cannot manage. How are you supposed to enjoy your new transitions if you are too stressed about debt due to a lack of financial planning?
3.	It is the easiest and most important time to save: Although saving in your twenties is the last thing you want to do, it’s actually the easiest time to do it. In your thirties and forties, there are many more payments and bills. During your twenties, you most likely are single, living in a small apartment or house with minimal furniture and a beater vehicle. However, when you get older there are children to support, family vacations to fund, four bedroom houses to buy and SVU’s to pay off. Saving now, when the payments are much smaller, will help ensure these dreams become a reality.

Your twenties don’t have to be all about saving. However, they also shouldn’t be all about spending. Find a happy medium where you can still enjoy the present but also ensure that there is money saved up for your future.

The Importance of Keeping Business Financial Statements

Financial statements act as a recording of business transactions. They are essential for any company and it is extremely vital that you keep an accurate record of all your financial statements. They will provide you with knowledge of business and economic activity and help you understand your company from a financial perspective.

There are several different types of financial statements including taxes, IRA contributions, retirement funds, brokerage securities, credit card and bank statements, bills, household payments and pay cheque stubs. This can get a little overwhelming.

Although keeping financial statements may seem annoying, time consuming and, quite frankly, a pain in the neck, if you are a business owner, you should be filing each and every financial statement.

Here’s why:

1.	Auditing Purposes: You never know when you may be selected for an audit and it’s better to be prepared than to be caught off guard. An audit is a stressful situation no matter what. However, keeping an accurate account of all your financial statements for the last three years will ensure the process is as smooth and carefree as possible. The longer you keep your records, the better. Business experts suggest you keep your financial statements for one year to permanently in order to ensure your business and your personal life is in check.
2.	Better Control of Your Business: Knowing where the money is going and where it is coming in will help you control and improve your business. It will also help you decide what needs budgeting, if it gets to this. It is best to set up a financial filing system for all your financial statements based either monthly or by type of statement. This way you can keep track of how much you are spending per month and where the money is going. With your financial statements in check, you can concentrate on the more important aspects of your business.
3.	Better Control of your Personal Life: By keeping a financial record of all your statement in the office, you will most likely transfer the same notion into your home life as well. This can benefit you and your family more than ever. Often when financial statements come at home, such as phone bills, credit card bills, rates, electrical bills and other household payments, it is easiest to either a) Throw it in a corner never to be seen again. B) Pay it and throw it out with the daily junk or c) Skip the payment process and go right to the trash can. Although B is probably your best bet, none of these answers are the correct way to handle your financial statements. You should be keeping them in separate folders much like you do at work. That way you can see where the money goes and if there is any extra money to spend on the luxuries in life.

By keeping an accurate account of your financial statements at home and at work, you are opening up a window of spending opportunity and securing your financial future.

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