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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: 473413

Reported Deaths: 9214
CountyCasesDeaths
Harrison32339474
Hinds30703575
DeSoto29814346
Jackson23263336
Rankin21111358
Lee14600217
Madison14043265
Jones13165218
Forrest12953233
Lauderdale11418297
Lowndes10249175
Lamar10048128
Pearl River8737209
Lafayette8078136
Hancock7324111
Washington6837147
Oktibbeha6820118
Neshoba6404201
Monroe6372158
Warren6326161
Pontotoc610393
Panola6071124
Bolivar6016143
Marshall5972118
Union564086
Pike5491133
Lincoln5232130
Alcorn520888
George457868
Scott451993
Leflore4401140
Prentiss437276
Itawamba436198
Tippah436180
Simpson4268111
Copiah425586
Wayne424863
Tate4234100
Adams4219114
Yazoo415886
Sunflower4088104
Covington407391
Marion4032100
Leake393185
Coahoma388198
Newton364474
Grenada3517101
Stone345657
Tishomingo324888
Attala321185
Jasper310262
Winston300391
Clay288273
Chickasaw282164
Clarke277487
Calhoun259739
Holmes259485
Smith243947
Yalobusha216747
Tallahatchie215649
Walthall205557
Greene204045
Lawrence203831
Perry196453
Amite193751
Webster191941
Noxubee174538
Montgomery169853
Jefferson Davis165541
Carroll159937
Tunica148434
Benton139433
Kemper137439
Claiborne125634
Choctaw124925
Humphreys123337
Franklin115227
Quitman101825
Wilkinson99835
Jefferson86632
Sharkey62120
Issaquena1916
Unassigned00

Alabama Coronavirus Cases

Cases: 768301

Reported Deaths: 13209
CountyCasesDeaths
Jefferson1093481727
Mobile699891179
Madison48418589
Baldwin35707452
Shelby35193291
Tuscaloosa33029512
Montgomery32582664
Lee21908204
Calhoun20140377
Morgan19351318
Etowah18583433
Marshall17272259
Houston16139353
St. Clair14956276
Limestone14129180
Cullman14069235
Elmore14010245
Lauderdale13128272
Talladega12399215
DeKalb11890229
Walker10231312
Autauga9493127
Blount9418149
Jackson9115136
Coffee8646161
Colbert8324169
Dale8284159
Escambia6456106
Tallapoosa6394168
Covington6313157
Chilton6243133
Russell591654
Franklin563597
Chambers5240132
Marion4628115
Dallas4626178
Clarke451471
Pike450091
Geneva4252106
Winston407987
Lawrence4046102
Bibb396177
Barbour338968
Marengo320981
Monroe311547
Butler309783
Pickens298769
Randolph294055
Henry293856
Hale286081
Cherokee279850
Fayette272271
Washington243545
Crenshaw232265
Clay221561
Macon214454
Cleburne209748
Lamar187839
Conecuh177139
Lowndes169056
Coosa163631
Wilcox154335
Bullock147142
Perry134235
Sumter123335
Greene119241
Choctaw72325
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