My Money and Me Guide

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What is Financial Planning?

Why is it important or relevant?

The fact of the matter is, financial planning is an act of maturity. It is about recognising responsibilities as you move from one stage of life to another; about becoming independent and being able to achieve personal objectives; attaining life goals and being able to be a productive members of society. This ultimately allows everyone to enjoy better living standards. Recognising that life is uncertain, and being proactive about mitigating the challenges that arise from it, is what makes financial planning relevant. It spurs you into thinking about how to cope with different life events that could be life-changing or life-threatening.

When should it be done?

Of course, all this is easier said than done. We may feel that ‘now is not the time’ or that we are not in the optimum position to manage our finances – or that we may not have anything to manage at all, but situations, especially financial situations are fluid and dynamic. They rarely stay at just one level for long. 

Although there is every possibility that our financial positions may detoriate, this is more likely to happen if we stand idly by and let ourselves be overcome by fear, ignorance or inertia. Taking a proactive stance where our finances are concerned is the first indication that we want to empower ourselves. The earlier we start our financial planning, the better we will become at it.

What we need to remember is that a financial plan is always personal and exclusive to the individual. It is relevant and applicable to the person who will be using it. Financial planning therefore needs to be customisable. At its core, it should help you meet your financial life goals, whether this means buying a home, paying off debt like education, business or vehicles loans, saving for early retirement, or just planning for uncertainty in general, and being able to live comfortably in one’s twilight years, some things must be seriously considered, such as providing for declining health, or ‘big ticket’ items that suddenly need to be replaced, like the family car or washing machine.

How do you plan financially?

Some people are really good savers. Regardless of how little that earn, they manage to put aside a bit every month. More importantly, they possess the discipline not to utilise these funds unless necessary. For those who have trouble sticking to their budget, the way financial planning is structured, is a boon. Properly applied, it will tell you in no uncertain you need to do, to get where you want to be. Make no mistake; for some, financial planning is a hard – necessary – dose of reality. it can be painful sometimes to realise how much more we have to do, to secure our future.

But it also widens our horizons, increases our knowledge, and demonstrates that it is in our power to improve our lives. it does this by providing advice on savings, investments, and how to decrease debt. it also helps you work with what you have, and offers solutions that can help protect your income, family and assets. Financial planning is for the long terml it is a journey, not a one-off process or tick-the-box exercise. It is about starting from where you are, and learning to create strategy and value that will carry you through life, keep you on your track for achieving your goals, and give you piece of mind in your golden years.

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