In the midst of busy life, planning anything longer than one or two days in advance may seem like a major hassle. Naturally, you’ll be wondering whether financial planning can actually assist?
We believe that it is. Five reasons:
1. A written financial strategy can increase confidence
Our research revealed that 65percent of those who have a financial plan written down claim to be financially secure however less than 40% who do not have having a plan experience the same degree of security. The majority of planners were “very sure” they would achieve their goals in terms of finances, as compared with just 18% of non-planners.
A written budget gives you an objective and measurable goal to achieve. Since you are able to track your progress, you are able to lessen doubt or uncertainty over your choices and make adjustments to overcome any the obstacles that can hinder you.
2. An investment plan could kick-start savings even with a modest amount of money
The most frequently cited reason as a reason for not having a plan can be “I do not have the funds.” This is a myth. Making plans, even tiny steps, does not require large sums of money to get started.
Financial plan can make a significant effect on families with low incomes by helping them increase their savings and budgeting routines. Writing down a plan can help savers to prioritize their goals and, as we mentioned earlier, can be a means to evaluate the their success.
3. The financial planning process can be used to help build an investment portfolio
Your financial plan gives you a full view of the terrain: You’ll know what your objectives are and how long you’ll need to achieve them and also how confident you are about the risk. Once you’ve got a full perspective, you’ll identify the best method to achieve each objective.
This will require both saving — setting aside funds you’ll need in the near future or in case of emergency–as and investing. This means making sure you have money in reserve for the long run and, in the ideal case it will increase. With your financial plan in place as your guideline that you can follow, you’ll be in your ability to make informed investment choices instead of rushing out with no any sense of direction, and relying on the most favorable results.
4. A financial plan could help you develop more discipline
It’s not just about investing. It’s about how money can bring to your security, confidence, and the quality of your life. This includes the security of life insurance, as well as the security of mind an emergency fund can bring. Research has also shown that planning helps to establish sound financial habits too.
There are good investment habits and good money practices. A written financial plan could help both.
5. The planning can be customized to fit the individual needs of every person
Your way of life could determine the decisions you make, even those involving your financial situation. If you know what kind that you’re when it comes to planning, you’ll be able make the right choices to reach those financial targets.
