How do I create a long-term financial plan?

Q: How do I create a lifelong finance plan and how much money will I need for all of those things? Emergency fund...

Posted: Dec 21, 2017 4:22 PM
Updated: Dec 21, 2017 4:22 PM

Q: How do I create a lifelong finance plan and how much money will I need for all of those things? Emergency fund, wedding, buying a house, retirement, college savings for my future kids (how much do kids cost?), elder care for my parents (god forbid, but just in case)? --Delilah

Life is full of big-ticket purchases: moving expenses, school tuition, weddings, honeymoons, buying a house, kids, retirement ... the list goes on and on.

You can't plan for all these things, but you can decide what savings goals matter to you. Add them as line items to your weekly budget, and make a point of sitting down once a year to craft a financial plan for next year's goals and expenses.

Related: How can I balance my finances?

Your first goal should always be saving for retirement -- even beyond the short-term expenses (vacations or other big purchases) that may feel more pressing year to year, according to Carrie Schwab-Pomerantz, senior vice president at Charles Schwab.

Retirement may not sound as exciting as buying a home or funding a honeymoon, but it's important enough to warrant the No.1 spot on your priorities list every year.

As Schwab-Pomerantz points out, retirement is always going to be expensive -- and it's always going to be up to you to prepare for it. People often prioritize short-term expenses instead, or they decide to save for their children's future before they save for their own.

"There're no scholarships for retirement," Schwab-Pomerantz says.

Her point: many of your circumstances could change. You could decide you want a small wedding. Your child could get a scholarship to college. But you'll still need money when you retire.

Schwab-Pomerantz then recommends reevaluating your budget and financial plan every year, to decide what your next priorities should be.

Take the time out of your holiday schedule to make sure you're adjusting the amounts you're saving and spending. Have a bit more wiggle room this year? Up your contributions to your savings. Need to tuck away some money for a new car? Cut back on money spent on other things.

And remember: There's no "one amount" to save for any of these goals. Instead, Schwab-Pomerantz recommends setting aside 10% of your income as savings. Adhere to that even as you earn more money with a bonus or a new job -- you never know when you'll need it.

"You know that your life is going to get more complicated," Schwab-Pomerantz says.

Have a money question for Broke No More? Ask us here to be included in a future column.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 320292

Reported Deaths: 7390
CountyCasesDeaths
DeSoto22299271
Hinds20782424
Harrison18455317
Rankin13933282
Jackson13740249
Madison10276225
Lee10068176
Jones8475167
Forrest7845153
Lauderdale7263242
Lowndes6524150
Lamar636688
Lafayette6315121
Washington5427138
Bolivar4842133
Panola4671110
Oktibbeha466398
Pearl River4610148
Marshall4576105
Warren4440121
Pontotoc426173
Monroe4163136
Union415977
Neshoba4066180
Lincoln4009113
Hancock387687
Leflore3516125
Tate342586
Sunflower339491
Pike3374111
Alcorn327474
Scott320374
Yazoo314771
Adams308586
Itawamba305178
Copiah299966
Coahoma299084
Simpson298689
Tippah292468
Prentiss284461
Leake272474
Marion271480
Covington267283
Wayne264842
Grenada264087
George252451
Newton249064
Tishomingo232469
Winston230382
Jasper222148
Attala215173
Chickasaw210759
Holmes190574
Stone188833
Clay187954
Tallahatchie180041
Clarke178980
Calhoun174232
Yalobusha167940
Smith164134
Walthall135547
Greene131934
Lawrence131424
Montgomery128943
Noxubee128034
Perry127538
Amite126542
Carroll122330
Webster115132
Jefferson Davis108534
Tunica108127
Claiborne103130
Benton102325
Humphreys97533
Kemper96729
Franklin85023
Quitman82316
Choctaw79218
Wilkinson69632
Jefferson66328
Sharkey50917
Issaquena1696
Unassigned00

Alabama Coronavirus Cases

Cases: 549394

Reported Deaths: 11328
CountyCasesDeaths
Jefferson810851571
Mobile42180832
Madison35733524
Tuscaloosa26186460
Shelby25638255
Montgomery25103615
Baldwin21921314
Lee16301176
Calhoun14725329
Morgan14650286
Etowah14192364
Marshall12465230
Houston10798289
Elmore10302214
Limestone10191157
St. Clair10166251
Cullman9975201
Lauderdale9621250
DeKalb8978190
Talladega8467184
Walker7351281
Autauga7244113
Jackson6993113
Blount6957139
Colbert6418140
Coffee5650128
Dale4931116
Russell455241
Chilton4476116
Franklin432082
Covington4283123
Tallapoosa4137155
Escambia402380
Chambers3731124
Dallas3609158
Clarke353361
Marion3264107
Pike314878
Lawrence3135100
Winston283672
Bibb268664
Geneva258782
Marengo250566
Pickens237062
Barbour234460
Hale227078
Butler225071
Fayette219763
Henry194844
Randolph187744
Cherokee187545
Monroe181041
Washington170639
Macon163051
Clay160159
Crenshaw156157
Cleburne153744
Lamar147237
Lowndes142154
Wilcox126830
Bullock124642
Conecuh113830
Coosa112129
Perry108826
Sumter106032
Greene93734
Choctaw62125
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