How to Develop Short and Long-Term Financial Plans
Savings and investments are the two ways in which you can make short and long-term financial plans. Banks and credit unions can offer you plenty of options for savings. Investments should have low risks and have continuously paying returns. You may choose from stocks, retirement plans, insurance, dividend reinvestments, and the bond funds.
Savings – When to Start
Junior Banker: Junior banker is a program for young adults who are under the age of 18. If you belong to this group, it is possible to make your parent or a guardian the joint account holder. You can open your account with a minimum deposit of $25. You get facilities like an ATM card, online banking, and mobile banking. Many of the public and private banks offer good interest rates where the interest is calculated quarterly and added to your account.
You can use the saved money for buying your favorite bike, shoes, or clothes without having to depend on your parents. You could also surprise them with gifts on holidays and other festive occasions.
Adult Savings: If you are above 18, it’s possible to open a savings account in a bank or credit union. These savings will be useful for your emergency expenses at times when you may run short of cash. It will also be helpful for your shopping and other liquidity needs. Regular transfer of a specific amount of money into your savings account can also help when you want to go for a mortgage. You could use that money for the down payment.
Senior Savings: Senior savings account can be critically helpful when medical expenses exceed the insurance limits. The interest rates are higher than the general savings account. You can also get health and medical cards from some of the banks. You can avail discounts on treatments and medications from the list of hospitals and health-care organizations with those cards.
Investments – Where and How
Your investments should earn you handsome returns. Consider the risk factors like the liquidity, inflation, and market fluctuations. These risks could be relatively higher in shares, debt investments, currency, and bonds.
Treasury-Bond: Investing in the US Treasury bond could earn you reasonably good returns at relatively lower risk. The treasury yields range from three months to thirty years. Inflation protection, federal-reserve interest rates, and security of your investments are some of the benefits you get. Since the investment is in a federal institution, you can get mortgage loans easily from the public banks.
Stock-Investments: If you are running a business or are familiar with risk management, the recommended choice would be stocks. You need to analyze the market position of the company before making any investments. A stockbroker or an investment consultant could be helpful in choosing the right company at the right time. You may choose to make short-term or long investments in stocks, depending on the returns you get from the initial investments.
NPS-Investments: The National Pension System gives you the maximum social security and recurring returns. Of course, you will need qualifying years of work experience (35 years of working for full state pension and more than 10 years for partial pension coverage).