Getting, growing and keeping your money can be best achieved with financial planning. A financial plan helps you to stop making money mistakes. Financial planning is the process of structuring your financial resources* to meet your life goals. These can be short-term goals, such as saving for your children’s education or for a new car, or long-term goals, such as making provision for your retirement.
Examples of financial resources are:
- Your salary
- Other sources of income such as interest or rent
- Your bank account
- Access to credit
Financial planning and money management are valuable tools because it:
- Helps you decide how to spend your money.
- Gives you the discipline you need to spend wisely and to save.
- Helps to avoid money emergencies.
- Helps you to stress less about money.
- Makes your expectations more realistic.
- Helps you to set measurable financial goals for your future.
- Helps you to understand the impact of your money decisions.
- Prompts you to re-look your position from time to time.
- Most importantly, helps you realise that YOU are in charge of your financial health.
Before you start your financial plan, ask yourself these 4 questions:
- Am I ready to accept responsibility for changing my own financial position?
- Can I change my attitude towards money?
- Do I believe I can take the necessary steps to achieve financial wellness?
- Can I see the benefits of financial planning for my future?
If your answers are all ‘yes’, you are ready to start:
- Get all your financial information together. This includes policies, contracts, bank accounts, and so on.
- Do a financial health check-up to determine where you are at the moment.
- Set goals for your life and agree them with your partner and family.
- Come up with a plan for how you can achieve your goals.
- Keep track of your progress.
- Review your financial situation regularly and make changes to your plan if necessary.
You can do your financial planning on your own, or you can ask a professional person to help you. The important thing is to start.
Remember: the purpose of financial planning is to put you in a position where you can face any financial challenge that may come your way in future.