Jean Francois Desormeaux, a well-respected real estate project manager and entrepreneur, gives his advice on the importance of financial planning.
Whether you want to buy a new home, save for your children’s college education or have a comfortable retirement, financial planning is the key. By preparing for unforeseen situations and establishing an emergency fund, you can handle bumps in the road such as losing your job or unplanned maintenance on your home without derailing your dreams, according to Jean Francois Desormeaux.
Jean Francois Desormeaux Talks About What a Financial Plan Looks Like
It’s important to take a systematic approach when it comes to managing your money and planning for investments and savings. A thorough financial plan covers insurance, mortgage, taxes, estate planning, retirement, and other essential areas. You also need to build in a cushion for unforeseen events such as illness, car repairs, or natural disasters, says Jean Francois Desormeaux.
Your financial plan should also reflect your financial situation, risk tolerance, goals, and expectations. Calculate how much cash you need for each category. If your current income falls short of your savings and living goals, it may be time to look for new employment or to scale back on your current expenses. That’s not an easy thing to do, but it’s the thing that can set you apart from other people who fail to plan for their financial future, Jean Francois Desormeaux says.
Benefits of Financial Planning
Jean Francois Desormeaux says there are many benefits to financial planning, including the ability to make yours unique to your situation.
Additionally, financial planning gives you peace of mind and leads to emotional well-being, which is good for your health. Let’s look at some of the other benefits of financial planning.
- Prioritizing what’s really important makes it easier to give up the things that aren’t.
- Identifying financial stressors in your life so that you can make positive changes.
- Planning for emergencies puts you in a good position if you ever have to face one.
- Recognizing your spending habits helps you keep tighter control over your cash flow.
Your financial plan should cater to your own needs and desires today and in the future, per Jean Francois Desormeaux.
How To Create a Financial Plan
Jean Francois Desormeaux believes that a financial plan should involve the following steps:
1. Set Financial Goals. Picture what your life will look like in 10 years? Will you have kids? Will your current children be grown? Plan for the appropriate contingencies,
2. Track Your Cash Flow. Jean Francois Desormeaux believes that you need an accurate picture of what your short to long-term goals are so that you can control your cash flow and stop any unnecessary spending keeping you from reaching your goals.
3. Prepare for Emergencies. Having an emergency fund can be a literal lifesaver. If possible, it’s a good idea to stash away three months’ worth of expenses. Start small with the goal of saving at least $1,000 for emergency car repairs and other unexpected expenses.
4. Eliminate Your Debt. Start with your smallest debt if you have multiple loans and credit cards. By eliminating one, you will have more money to put towards the next bill. This can help you slowly eliminate your debt, Jean Francois Desormeaux explains.
5. Invest. Meet with a financial planner to determine your risk tolerance and to get advice on how to begin your investments. Start with company-sponsored retirement plans, especially if your company matches some of the money that you put away.
Following these steps gives you a great start toward establishing a solid financial plan!