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Common Financial Planning Mistakes to Avoid in Birmingham

Being prepared for your financial future is a critical way to ensure you have stability and security in your life. It’s easy to feel lost in information and uncertain as to where you can get credible advice. At Sovereign CPA in Birmingham, we focus on how our clients can make educated decisions about their finances and how we can help. 

For your financial needs, Sovereign CPA can provide you with reliable information. To begin securing your future with smart financial planning, contact us at 205-402-4245. 

5 Most Common Mistakes to Avoid

There are some basics of financial planning that can start you on the right foot, no matter where you are in your financial journey. Beginning with these can give you a great foundation moving forward. 

While it may seem like retirement is far away, the sooner you begin to plan, the sooner you can comfortably ease out of working full-time or spend your time doing what you love. Starting slowly can have little impact on your budget while still providing you with long-term security. 

1) Not Knowing Your Spending Habits

  • Part of struggling with finances is often not recognizing where your money is going. To help manage this, start a finance tracker or organizer. There are many applications available that can link up to your bank account and give you a visual report on your spending habits. Writing them down as you go is another option. Once you see where most of your money is going, you can begin to look at where you can save. 

2) Not Looking at High-Interest Debt

  • While it may feel like you are in a never-ending debt loop, looking at the interest rates of your loans or debt can help minimize excessive payments or funds. Start by analyzing which of your debts have the highest interest and prioritize paying those off. By doing this, you can start to save money that can go elsewhere, such as towards other debt. 

3) Buying New

  • When we look at purchasing larger items, like a car, we often look at new items. Consider extending your options to used or like-new to save large sums of money while still getting a quality vehicle or item. This can keep your payments down each month, allowing you to distribute that towards credit card debt or savings. 

4) Not Considering Retirement

  • When you are living paycheck to paycheck, it can be difficult to imagine retirement. While it may seem a long way away, if you begin saving for retirement through your paychecks, you may be able to work a lot less later and be able to live comfortably. Taking advantage of employer retirement plans or retirement accounts can help you appropriately plan without being unable to pay other bills. 

5) Not Having a Financial Plan 

  • Having a plan doesn’t have to mean stocks, extensive retirement plans, or other strategies that seem out of reach. It can be as simple as saving a little bit per month or starting to have a retirement plan at a lower rate. Try to set aside some time each week to assess your plan and adjust as necessary. 

Birmingham Financial Planning Services

Are you looking for some help with financial planning in Birmingham? Sovereign CPA can help! We provide our world-class, high-quality services to individuals, small businesses, and Fortune 500 companies alike. With over 100 years of collective experience, we focus on building successful working relationships that provide stability and financial freedom. 

Call us today at 205-402-4245 to get started with financial planning! You can also schedule an appointment or message us here.

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