Financial Planning Month: build your roadmap to success

Posted on by Sebastian Ky. This entry was posted in Financially Fit, Life Events and Changes. Bookmark the permalink.

As we enter October, Financial Planning Month serves as a timely reminder that achieving your financial goals is possible with the right strategies in place. Whether you are just beginning your financial journey or looking to fine-tune your approach, this month is an opportunity to take control of your finances, reduce stress, and set a solid foundation for the future.

1. Organize your finances: know where your money is going

A key first step in financial planning is organization. As outlined by BECU, understanding your inflows (income) and outflows (expenses) is essential to building a stable financial life​. Budgeting tools like CreditKarma can help you track and analyze your spending habits. You might be surprised at how certain categories — like dining out or impulse shopping — are affecting your overall financial health.

By organizing your expenses, you can see patterns and identify areas where you can make cuts to improve efficiency. This is especially crucial if you’re balancing multiple financial goals, such as saving for a home, retirement, or paying off debt.

2. Build an emergency fund

An emergency fund is a financial safety net, and according to Fidelity, it’s advisable to save enough to cover three to six months of essential expenses. Start small by aiming for an initial buffer of $1,000, then gradually build your fund. By automating your savings, such as setting up direct transfers from your paycheck to a dedicated savings account, you can grow your emergency fund effortlessly over time.

UW faculty and staff, given the diverse roles and responsibilities you juggle, an emergency fund can give you peace of mind in times of unexpected financial stress—whether it’s a car repair, medical bill, or a sudden shift in income.

3. Tackle high-interest debt

One of the most effective ways to take control of your financial health is by addressing high-interest credit card debt. BECU points out that consolidating debt into a lower-interest loan or considering a zero-interest balance transfer can help reduce the time it takes to pay off balances​. For many, using strategies like the debt snowball (paying off smaller debts first) or debt avalanche (tackling the highest-interest debts first) can provide motivation and progress.

Paying down high-interest debt quickly frees up more money to invest, save, or spend on long-term goals.

4. Contribute to your retirement savings

Now is also the perfect time to assess your retirement savings. According to Fidelity, it’s wise to aim to save at least 15% of your pre-tax income for retirement, which includes any employer match​. If you aren’t already contributing this amount, try increasing your retirement savings by 1% annually, especially when you receive merit increases. Every dollar counts, and thanks to compounding, your retirement funds can grow significantly over time.

UW employees are fortunate to have access to workplace retirement plans, such as the Washington State Deferred Compensation Program (DCP). If you don’t already have a plan in place, it may be worthwhile to explore other retirement savings options, such as an IRA.

5. Balance debt repayment and long-term goals

For many people, including young professionals at BECU, managing debt while saving for the future is a juggling act. Prioritize paying down debt but also ensure that you are saving toward long-term goals, whether it’s for retirement, a house, or your children’s education.

One strategy is to save a portion of any windfalls — such as a tax refund or bonus — toward both debt repayment and your future. As you reduce debt, you’ll free up more resources to focus on savings and investments.

6. Check and adjust your investment mix

Fidelity suggests regularly reviewing your investment mix to ensure it aligns with your financial goals and risk tolerance​. For example, market fluctuations may have caused your portfolio to become too stock-heavy or bond-heavy. Rebalancing your portfolio ensures that you remain within your risk comfort zone while positioning yourself for long-term growth.

If you’re unsure how to balance your investments, consider reaching out to a financial advisor for personalized advice.


Take action this financial planning month

Financial Planning Month is an opportunity to take small, manageable steps toward a more secure financial future. Whether you’re saving for an emergency fund, tackling high-interest debt, or reviewing your retirement contributions, these steps will help you achieve financial wellness. The journey may feel overwhelming at times, but with discipline and the right tools, you can gain confidence and control over your financial future.

The University of Washington also offers various resources, including webinars and access to financial planning tools, that can support you in achieving your goals. As faculty and staff, you can also benefit from workplace programs like TIAA and Fidelity for retirement planning and the Washington State Employee Assistance Program (EAP) to manage financial stress.

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One Thought on “Financial Planning Month: build your roadmap to success”

On October 3, 2024 at 10:35 AM, Dana Twight said:

Great column. Nice to see this month designation mentioned. In addition to tools offered by employer retirement plans, don’t forget that the Consumer Financial Protection Bureau is a great no-cost resource for all things financial, including filing a complaint (no lawyer needed) about a financial company.
http://www.consumerfinance.gov or this link https://www.consumerfinance.gov/consumer-tools/

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