Weekly Reflections #16 : Financial Planning

Warm greetings to all my steemit friends. It's yet another beautiful day and also an opportunity to relate with the members of this community on the topic, financial planning. Special appreciation to @damithudaya for organizing yet another amazing contest. Remain blessed as I pour out my view on the topic under review.

---

Do you think Financial Planning is important and why?

---

source

This question reminds me of a quote that says " he who fails to plan for his future today, has planned to fail tomorrow" I believe the statement 100%. We have also been told that our future is in our hands. That's one of the statements that I failed to understand when I was younger, but today I have clear understanding of it. As humans, we can achieve dreams but only and only if we plan our lives well and we are committed and dedicated to the plan.

Whatever plan we have today is to make the future safe. And of course, financial planning is not excluded because to me, it's among the most basic plans that everyone must have. If you are privileged listen to the story of most of the billionaires today, you will get to understand that they were not born with silver spoons. As a matter of fact, most of us came from a better background than them. But today, they are financially ahead.

The reason is, they planned their life to be rich and they were committed to it. Take for instance, if you plan to either build a house or buy a car next year, the money to execute that project won't just come your way in a day. You have to plan on how to make savings to meet your target. That's the plan. Most people are poor today because they failed to plan yesterday.

A financial plan is essential because it guarantees our future financial freedom. It saves us from poverty and brings our dreams to reality. Without a financial plan, it's almost impossible to build a house, buy a car, go on a trip around the world, and many more things that require money.

How do you track your expenses and savings?

source

It's clear that tracking financial expenses and savings is very vital in managing finances. Before now, I was ignorant of how to track or make savings until I attended a program on financial planning. Ever since then, I have learned a few tips which I will share with you below.

• write down all transactions made on paper. No matter how small the amount might be, I write it down.
• I categorize my expenses into housing, food, clothes, transportation, and other categories.
• I try as much as possible to determine how much I want to spend in each of the categories.
• every month I review the categories to know the areas I need to improve and to also track things that were not necessary for me to have spent money on.
• I differentiate my needs from my wants.

How I make savings

• At the beginning of every year, I write down things I intend to achieve to make savings for them. With that, I'm able to achieve my target.
• I created a separate account that will be used to save money.
• At the end of every month, there is a certain percentage of my salary that goes to the account automatically.
• To stay motivated, I review my saving progress

What are some common financial mistakes to avoid?

A lot of people have failed in the financial sector due to so many mistakes and arrogance towards finance. Some of the errors are:

1. Lack of differentiating needs from wants: this has made many people spend a lot of money on things that are not necessary.
2. Lack of target. To be able to make savings, there is a need to have a goal you want to achieve at the end of the week, month, and year.
3. Lack of financial recap: A financial recap helps us to know the things we have spent money on and the areas we need to improve
4. Lack of savings account. To be able to save money, there is a need to have a separate savings account.

In conclusion, financial planning is very crucial. Unless you want to end up poor. Although it's sometimes hard to save money due to some challenges, it's worth doing at all costs. Remember, if you don't. Save today, you will be poor tomorrow. Thanks for going through.

I now invite @simonnwigwe, @patjewell, and @pandora to participate.