Room for Error in Your Financial Plan
In this episode, Corey and Rachelle discuss a few ways you can leave room for error in your financial plan. Nothing goes perfectly! Buffers in various aspects of your financial life can go a long way toward helping you achieve your goals.
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“Room for Error” can mean a lot of different things:
- Extra cash on hand! This may seem inefficient, but even some hugely successful companies do this.
- When Bill Gates headed up Microsoft, they kept enough cash on hand to keep the company afloat for a year without revenue.
- Ideally, you have enough to at least cover your bills for three to six months.
- Wiggle room in your monthly spending.
- If you can spend less than you’re making, you have room in the budget for the unexpected.
- Boring, but very helpful when it comes to the unexpected.
- Winter storms wreaked havoc this year with downed trees, burst pipes, and car accidents. Insurance is incredibly helpful in these circumstances.
- Extra retirement savings. You may plan to work to Age 65, but there is no guarantee you will be able to. Saving more can put you in great shape to make changes if needed.
Spending every cent you earn and living life to the fullest may be a lot more exciting, but it can also cause unnecessary stress. Having a little “extra” set aside can help buy you some peace of mind. That is a huge part of financial planning!
For more financial planning tips from Corey and Rachelle, find them on social media!
LinkedIn: @CoreyJanoff and @RachelleVanderzanden;
Instagram: @CoreyJanoff and @VanderzandenRachelle;
and Twitter: @CoreyJanoffCFP and @RachelleFinance
Discussions in this show should not be construed as specific recommendations or investment advice. Always consult with your investment professional before making important investment decisions. Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Finity Group, LLC and Cambridge are not affiliated. Cambridge does not offer tax or legal advice.