Why We Need to Have Financial Planning
Many people seldom realize the importance of financial planning. People ignore or delay this action because they do not seem to see the benefits that can come out of this activity. You should realize not to ignore this activity and start it immediately so that you will get the most of your financial returns sooner.
Several people disregard financial planning because of possible ignorance on how the activity would benefit them. In order to see what are the usual misconceptions of people about financial planning and to set up proper approach to it, a group of professionals set up a survey about it. The survey showed that no measurable goals were set. The effect on other financial matters should be understood when making a financial decision. There should be no confusion between financial planning and investing. People should re-evaluate their plans regularly. We should realize that we have to start financial planning when we are young and not when we are old, and that it is also for the common people and not only for the wealthy.
Be informed that retirement planning is not financial planning. Do not wait for crisis to happen before you do your financial planning. People should further understand that when you conduct financial planning, your goals of returns for your investments must be realistic, and that it is a means for your to have control of your money, and that it is not meant for tax planning.
Therefore, for one to arrive at the knowledge and pitfalls described above, you should study well about financial planning. The goal of getting results from your planning is your responsibility as much as your hired planner’s responsibility.
There are some advices to listen and follow if you are to achieve the best return of your investment from the financial planning activity you conducted.
First is to conduct your financial planning without delay or excuses. It is observed that those who invest soonest, even at small amounts, are getting higher returns than those who are postponing their plans. One should willingly develop a good financial habits like saving, budgeting, investing and have a periodic review of one’s finances in order to be able to meet economic crisis. Be realistic with your expectations on what financial planning can do to your finance situation, especially that this activity is not a one-time fix but a continuing process.
It is important that you set goals for yourself and your finances that are realistic and attainable. Usually, people would want to achieve comfortable results of their investment, however, one should be able to quantify what he or she means with being comfortable.