Financial Planning is important process in our life. Most of us not pay attention about financial planning and do as we like even though we’re just low/middle income earner. People who don’t have financial planning always have big problem in their retirement age.
What is Financial Planning?
Financial planning involves questions about the future, your dreams and goals. It covers what you want in your life, for example, get married, buy a house or car, have a baby and to finance education of our children.
The steps in Financial Planning
There are five important steps in the process of financial planning:
1. Evaluate your current financial position
– It is the first and important steps. Only you know how your financial position whether it is bad or not. If you don’t know, just ask some expertise or maybe get advice from your parent .
2. Setting your financial goals.
– Don’t have financial goals ? It is bad as we must have the financial goals. Let’s started from today. The goals that we could setting such as time to settle all loans, buying an assets in time period and have a bunch of saving money.
3. Preparing your financial plan.
– Preparing financial plan also one of headache situation. You need to brainstorm and getting the proper financial plan. Write your financial plan in your diary or maybe some financial planning software such as MoneyGuidePro.
– The process to implement the financial plan not an easy task. You must follow what you wrote. Don’t ever change it without change at your diary/software.
5. Monitor and review your financial plan.
– After implement the financial plan doesn’t mean your work is finish. You need to monitor and review if there’s any changes need to do.
BENEFITS FINANCIAL PLANNING
If you can arrange a good financial planning habits and orderly, you can be sure you have enough money to be used in the future. With a personal financial plan, you will:
1. Greater control over the financial affairs and you are able to avoid excessive spending, debts unmanageable, bankruptcy, or dependent on others;
2. Strengthen your personal relationship with the people around you, like your family, friends and colleagues, because you are happy with your life and not have to borrow money to meet basic needs or expects contributions from others;
3. Free from financial worries because you have planned for the future, anticipating expenses and achieve personal goals of your life;
4. Be more effective to obtain, use and protect your financial resources for life, not only for yourself but also for loved ones
5. In other words, when your personal financial plan is manageable, you’ll learn something about the future needs and financial resources available. You also can live happily, because it can control everything in your life.
Now, how about your opinion about financial planning? Is it important or you can ignore? Let’s share some of your idea..