Why Financial Planning Is Important – Achieving Your Financial Goals
Why Financial Planning Is Important
Financial planning and systematic investment approach is important for achieving financial goals. Mentioned below are the facts of life which justify why financial planning is most important thing in life:
- Uncertainty of the span of life of an human being
- The adequate continuity of income to meet the expenses as well as responsibility such as education, loan repayment if any; irrespective of the span of life
- Continual income flow guarantees the same living standard of life to the family and will protect all other liquid as well as non-liquid assets from the discounting.
- The span of life – One may live too short or too long. No individual can predict – what the scenario will be.
- Expenses of family and self are never ending and will continue until your death or even beyond that. If expenses are bound to continue then how will you meet it? This is the core success which everyone faces.
To achieve financial success and become financially secure we should have an investment structure which will very well address the above aspects of our life. The goals are achieved as per your present cost of living and earning capacity.
End objective of your financial investment plan should assure you:
- Creation of income
- Consumption of income
- Continuation of income irrespective of your span of life so that family does not suffer in case of any loss.
- Conservation of income
- Financially independent retirement and not creating burden on your family.
Is there any process of financial planning?
You should consider three things while planning out your finances:
- Where you’re today
- Where do you want to reach after “N” years
- How do you reach there
What things should be kept in mind while developing a financial plan?
You should consider 5 things while developing a financial plan:
- Time frame
- Present Income