Stephen Goehl on Safe Money Habits

As people begin their careers and start earning money, there is one important concept that most people forget or ignore: finances. It is the very reason why certain individuals are able to increase their capital effortlessly, while others continue to lose money. It is also why a lot of people find themselves in problems down the road when facing retirement. This is something financial advisor and owner of Goehl Financial Services, Stephen Goehl, wants to help people avoid by creating a custom financial plan early on. Finances include everything that relates to proper spending habits, budgeting, forecasting, saving, and investing.

Generally speaking, most people do not go through an extensive study in this area. Hence why there are so many financial consulting firms and professionals in the world. After all, knowing what to do with one's money is not easy and can be difficult to comprehend. Additionally, the rise of investment opportunities certainly does not help as people now want to become millionaires more than ever. Some believe that they can trade stocks easily while others often attempt to invest in start-up companies. Sadly, such ventures result in a loss more often than they are profitable.

Creating a Plan

An individual that is struggling to attain financial freedom must always have a plan in place. For some people, that means putting aside a fixed amount of money every month. For others, it means avoiding unnecessary purchases and impulse buying. Once a person develops healthy spending habits, they get a lot closer to enjoying financial freedom. So, why do millions of Americans have outstanding debt? Because they neglect the low-end decisions and the importance of budgeting.

Even cities and governments deal with this problem. For example, the current debt in New York City is a whopping $110 billion. That indicates a nearly 100-percent growth since 2002. And they are not alone in this issue. The United States as a country currently has more than $21 trillion in debt. Shockingly, that number goes up by around $100 every five seconds.

Budgeting as a Safe Money Concept

In order to properly allocate earnings, one must be aware of their upcoming expenditures. According to Stephen Goehl, a financial consultant with over 40 years of experience, most people do not understand the importance of budgeting. Unfortunately, that causes a lot of problems as people overlook important payment deadlines. So, people must realize that simply knowing about an upcoming payment is not enough. Instead, they should already have a predetermined amount of money put aside.

The easiest way to start budgeting is by making a list with two columns. As simple as it sounds, the results generally stun people. One of the columns can be used to write all of the income one receives. The other side of it is where costs of living are placed and totaled. Ultimately, the goal is to have more money on the income side than the expense side. If that is not the case, liabilities will eventually arise and money issues will begin.

Not Thinking Long-Term

The second largest problem for average workers is the lack of a long-term perspective. What people fail to realize is the longevity of their career. Meaning, one cannot work forever. Eventually, they will either have to leave their job due to mandatory retirement or they will be unable to continue due to physical restrictions. When that happens, it is important to have a sizeable retirement account to rely on. Yet again, as Stephen Goehl notices, a plethora of his clients often neglected this issue.

Some experts suggest that one should have twice their annual salary in a retirement account by the age of 40. That will enable them to grow it well by accumulating interest. Also, in case of an unforeseen difficulty such as losing a job, they will have something to fall back on. There are two ways to get a hold of a praise-worthy retirement account. First, one can do it through their company if it is offered as a benefit. This is where they can set up matching contributions and grow the funds.

In case of independent contractors or people whose employers do not offer this benefit, they can get a personal retirement account. Almost every bank offers a plethora of options for saving. So, one simply has to do some research and stay dedicated in order to save enough money to retire free of financial worry.